Gemini plans to offset Bitcoin carbon emissions with the launch of Gemini Green
- Gemini has purchased carbon credits worth $4 million to prevent over 340,000 metric tons of carbon from entering the atmosphere.
- The initiative will offset Gemini’s share of non-renewable Bitcoin energy consumption since the beginning of this year.
As concerns around the environmental impact of Bitcoin mining continue to mount, crypto exchange Gemini has announced the launch of Gemini Green, a long-term initiative to help decarbonize Bitcoin and incorporate climate-conscious practices into the firm’s activities.
While recent estimates suggest that up to 56 percent of Bitcoin mining is now being done using renewable energy, many Bitcoin miners continue to use non-renewable sources that emit carbon dioxide into the atmosphere. In an attempt to limit the harmful effects of the latter, Gemini has collaborated with Climate Vault, a non-profit that aims to eliminate carbon pollution, to purchase carbon permits and prevent almost 342,000 metric tons of carbon from entering the atmosphere.
These carbon permits, which cost the firm $4 million, will help offset its share of non-renewable Bitcoin energy consumption for the first half of this year. Climate Vault has acquired the permits from government-regulated cap and trade markets to remove them from circulation. The permits have been “vaulted”, effectively preventing other companies from using them and therefore reducing the overall amount of CO2 emitted into the atmosphere.
Gemini claims the resulting reduction in emissions equals nearly a billion miles driven by a typical passenger car. The firm plans to continue offsetting its carbon footprint until only renewable energy sources are used in Bitcoin mining.
“The creation of Gemini Green was inspired by our goal to better understand the energy consumption and impact of crypto usage and to find realistic solutions to this industry-wide issue,” Blair Halliday, head of U.K. at Gemini, told Tearsheet. “Our partnership with Climate Vault represents a significant first step, as we are the only cryptocurrency exchange and custodian that has bought permits to offset our carbon footprint from the Bitcoin mining process using this transparent and comprehensive model.”
While Gemini claims it is the first crypto platform in the world to offset its carbon emissions, a number of other firms have recently announced similar plans as they look to reduce their carbon footprint.
The concept of offsetting has been gaining traction in the industry ever since Elon Musk tweeted that Tesla will not accept Bitcoin as payment for its vehicles due to environmental concerns. Following the announcement, two leading crypto exchanges – FTX and BitMEX – pledged to become carbon-neutral and donate funds to offset emissions. More recently, crypto-focused hedge fund One River Asset Management also announced plans to introduce carbon-neutral ETFs.
Many crypto platforms are now actively working to address the issue of carbon emissions and make the crypto ecosystem more sustainable, according to Marie Tatibouet, CMO at crypto exchange Gate.io.
“New entrants are increasingly opting for the proof-of-stake (PoS) mechanism instead of proof-of-work (PoW). PoS makes the mining process completely virtual, and doesn’t require you to waste real-world resources,” said Tatibouet. “Secondly, several projects like Ripple and Qtum have joined the Crypto Climate Accord, whose signatories make a public commitment to achieve net-zero emissions associated with all of their crypto-related operations by 2030.”
Tatibouet believes the recent crypto market crash was the result of two major events: Tesla refusing to accept Bitcoin payments, and China banning Bitcoin mining to cut down on thermal emissions. “Both of these issues could have been mitigated if Bitcoin mining was more sustainable,” she said. “Crypto needs to be greener than it currently is for it to grow and achieve wider acceptance. It’s as simple as that.”
Doug Schwenk, chairman of crypto research platform Digital Asset Research, says recent efforts to address environmental concerns through greater transparency on energy sources, dedicated clean energy miners, and carbon credits have helped address some of the issues raised by environmentally conscious investors. However, there’s still much work to be done.
“It’s hard to imagine Bitcoin, DeFi, and the broader crypto industry failing on account of ESG concerns alone, but it could create enough uncertainty and doubt to delay potential adoption and result in some stagnation,” said Schwenk.
“The next wave of crypto adoption will bring in a broader audience that will include more ESG-conscious investors. Environmental concerns will almost certainly be a big industry topic – one that becomes more and more crucial to address as crypto moves towards the mainstream.”