New York shuts down fossil fuel crypto infrastructure

New York became the first state to enact a temporary ban on new cryptocurrency mining permits at fossil fuel plants in a move aimed at addressing the environmental concerns over the energy-intensive activity. The legislation, signed by Gov. Kathy Hochul, will impose a two-year moratorium on crypto-mining companies seeking new permits to retrofit some of the state’s oldest fossil fuel plants into digital mining operations. The measure also requires New York to study the industry’s impact on the state’s efforts to reduce its greenhouse gas emissions.

The policy creates a pause on permits for fossil fuel power plants that house proof-of-work cryptocurrency mining, which is used in the transaction of digital money. Hochul states this moratorium is important in stopping the potential increase in emissions that could occur through revamping of old power plants with unused electrical infrastructure.

The legislation builds on New York’s Climate Leadership and Community Protection Act and will trigger a study by the state Department of Environmental Conservation to study the impacts of the cryptocurrency mining industry on the environment.

Despite concern around the policy’s effect on the cryptocurrency industry, the state’s energy operations that draw power from the grid wouldn’t be affected, nor would blockchain activities involving mining for cryptocurrency. In the justification of the bill, State Sen. Kevin Parker writes that the crypto-currency companies operating within fossil fuel plants “are essentially operating as an electric generating facility that uses fossil fuels.”