The Department for Environment, Food and Rural Affairs (Defra) has awarded a contract to a consultancy to explore the business opportunities in co-locating crypto mining at open and closed landfill sites in the UK. However, one crypto expert has warned that it’s too early to know whether this type of strategy is beneficial for businesses or the environment.
According to the notice update on the government’s contract finder, the contract was awarded to Ricardo-AEA on 27 February and was worth just under £49,500. The consultancy firm was tasked with scoping a study to investigate the “environmental and financial issues associated with co-located, Net Zero-contributing businesses such as Solar Photovoltaic (PV) panels” on landfill sites.
As part of the scope, Defra signalled that it was interested in learning more about “business ideas which could be co-located on landfill sites” that could provide alternative sources of revenue generation. It goes on to say that “many of these opportunities will exploit the underutilized electric export facilities already in place” but some will be freestanding of that infrastructure.
The only opportunity named in the contract notice is crypto mining, the process of generating new crypto tokens, such as Bitcoin, by solving complex mathematical problems.
Crypto mining using landfill-generated gas is at a very early stage
Gases produced at landfill sites can be converted into electricity. Biffa, a sustainable waste management company in the UK, is the second-largest generator of electricity from landfill gas in the country. It produced an output of 530GWh in the last financial year, representing 10% of total electricity generated from UK landfill gas.
But repurposing energy from these gases for crypto mining is novel and as Alex de Vries, founder of Digiconomist, told Tech Monitor, the concept is still being developed.
“Currently, bitcoin mining using methane from landfills is at a very early pilot stage at best,” he said. He points to two companies that have said they are doing this; XcelPlus and Vespene Energy – the latter has a pilot 1.5MW in California.
Oil and gas companies in the US are also partnering with Bitcoin miners. One, Kirkwood Oil and Gas LLC, works with miners connected to EZ Blockchain, based in Chicago, to cut flaring at some of its 600 oil wells located across the Rocky Mountains. The scheme sees emitted natural gas used to power mobile crypto mining rigs.
But De Vries says that it’s too early to tell whether this business model is viable and that the power could be used for other purposes.
“If it is possible to convert landfill methane to the power needed to run mining devices, we could also convert it to power for other purposes – and possibly displace some of the fossil fuels currently used elsewhere,” he told Tech Monitor. “Rather than using it to power mining devices that do nothing more but generate useless numbers 24/7.”
He points to discussions currently taking place in Sweden, which is one of Europe’s top three Bitcoin mining sites. Bloomberg News reports that the government is trying to track how much power Bitcoin miners are using, and is reportedly keen for power to be used by the nation’s steel industry instead.
Crypto mining on landfill sites will make ‘no difference to the environment’
Defra’s interest in co-locating crypto mining operations on landfill sites relates back to the government’s Net Zero ambitions. But environmental experts have criticised the crypto mining industry for its “greenwashing” of its practices and its electricity consumption.
Earth Justice claims the electricity consumption of crypto mining in the US was responsible for an excess of 27.4m tonnes of carbon dioxide (CO2) between mid-2021 and 2022. This is three times as much as emitted by the largest coal plant in the US during the same time. Its estimates are based on the energy needed to solve the puzzles for mining.
Bitcoin’s energy consumption peaked in December 2021, using 204.5 TWh per year, according to Digconomist’s Bitcoin Energy Consumption Index.
In the case of Defra's ideas, De Vries says that crypto mining on landfill sites will make no difference to the environment compared to what is currently happening: "The amount of CO2 generated from combusting the methane to generate electricity is almost the same as the amount of CO2 generated by combusting methane in the flaring process," he says.
He adds the negative publicity surrounding crypto mining could discourage investment in the infrastructure needed to capture the gas and generate power for alternative purposes. He is also not convinced that the crypto mining business model is scalable. "Even if it is, it could still prove to be controversial," De Vries adds.
Defra says that as the landfill gas reduces and the amount of generated electricity starts to fall, the waste industry is starting to make use of their grid connection to also deploy solar panels and/or battery storage at some sites. Cultivation of biomass crops on landfill sites is another avenue being explored by some companies.
The agency says it has commissioned this project to understand these trends and their potential, and says the results of the research will be published in due course.