US Senate, Cryptocurrency, AI Data Center Carbon Emission Regulation Bill Proposed
Sheldon Whitehouse, U.S. Senator (Source: AP)
A 'Clean Cloud Bill' has been introduced in the U.S. Senate to curb the power consumption of cryptocurrency mining companies and artificial intelligence data centers. This bill aims to regulate carbon emissions due to excessive energy consumption and protect consumers from rising power charges.
This bill, jointly proposed by Senators Sheldon Whitehouse and John Fetterman, includes a measure for the U.S. Environmental Protection Agency (EPA) to set annual carbon performance standards for cryptocurrency mining facilities and AI data centers with installed IT power capacities exceeding 100 kilowatts. These standards are strengthened by 11% each year, and a fine of $20 per ton of carbon dioxide is imposed for excess emissions. The fees will be additionally increased by $10 each year, reflecting the inflation rate.
The senators pointed out that the proliferation of cryptocurrency mining and AI technology is placing an excessive burden on the power grid, with demand exceeding current clean energy production capacity. In particular, they predicted that data centers consume 4% of U.S. electricity and could reach 12% by 2028. They explained that as a result, there are side effects, such as increased carbon emissions, with coal power plants in some areas being restarted.
Senator Whitehouse emphasized, “We don’t need to choose between advancing artificial intelligence and climate safety,” and he stressed that large tech companies have sufficient financial capacity to reduce current energy consumption and invest in clean energy. He stated that this bill will guide companies to utilize new energy sources and contribute to transforming the U.S. power grid to net-zero carbon emissions within ten years.
According to the bill, 25% of revenues generated from carbon fines will be used to support electricity bills for low-income households, and the rest will be used as grants for clean energy and long-term storage projects.
Meanwhile, the cryptocurrency industry is already rapidly transitioning to renewable energy. A recent report predicts that by the end of 2024, 41% of Bitcoin mining will use renewable power, and this ratio could increase to over 70% by 2030.
Some industry insiders protest that the bill excessively regulates only certain industries. Matthew Sigel, Head of Research at VanEck, pointed out, “This legislative attempt could lead to a meaningless strategy of shifting the blame to server racks.”
Additionally, there is concern that this bill could stall the transition among cryptocurrency mining companies expanding their business areas to data center hosting for AI high-performance computations. This bill could clash with administrative policy, especially since President Trump declared in 2023 the abolishment of the Biden administration's AI safety standards and his intention to make the U.S. the capital of the cryptocurrency and AI industries.
Experts warn that if coupled with external variables like trade conflicts, regulation could become a risk factor shaking the very infrastructure of cryptocurrency.