Norway Plans Law to Limit Crypto Mining by Regulating Data Centers

The government of Norway has announced its intention to propose new laws governing the country’s data centers.

According to a local news report, Ministers of Digitalization Karianne Tung and Energy Terje Aasland stated that these measures are mainly aimed at reducing energy-consuming activities such as cryptocurrency mining, which they believe does not meet Norway’s environmental targets. The bill would oblige data centers to register with the local authorities and provide them with extensive operational data.

JUST IN: 🇳🇴 Norway becomes the first country in Europe to introduce regulations for data centers aimed at controlling which projects are permitted.

They state #Bitcoin mining “is an example of a type of business we do not want in Norway” 😮 pic.twitter.com/NjmiCdkhc1

— Bitcoin News (@BitcoinNewsCom) April 15, 2024

The ministers raised concerns about the environmental impact of unregulated industries, especially issues related to cryptocurrency mining. Minister Aasland also said that these activities are a significant source of greenhouse gas emissions and thus should not be conducted in the country to pursue sustainability objectives. Norway, being a country with a lot of renewable energy resources, made it a natural choice for these industries and, hence, this legislative response.

Registration and Disclosure Requirements

Under the new regulations, all data centers in Norway will have to register and supply full details on their operations, including details on ownership and management. This registration process aims to improve the transparency and government control of the data center industry. Minister Tung stressed that these regulations are aimed at eliminating projects that do not align with Norway’s infrastructure objectives.

The legislation is not only to regulate but also to steer what kind of data centers shall be beneficial to the country’s infrastructure. Minister Aasland indicated the government’s favoring of data centers that provide services for social infrastructure, whereby he was able to distinguish between utility-driven and purely profit-driven initiatives.

The Response to Crypto Mining

The Norwegian government’s stance on cryptocurrency mining has been clear, with both ministers Tung and Aasland indicating a firm opposition to the industry. Despite the economic opportunities presented by the relatively low cost of electricity in regions like Northern Norway, the environmental costs have raised significant concerns. Reports from local media indicate that certain Bitcoin mining operations in the region consume electricity at rates comparable to small municipalities.

This legislative action is expected to empower local authorities to make informed decisions about allowing or rejecting data center projects in their jurisdictions. By mandating detailed reporting from these centers, local policymakers will be better equipped to assess the potential benefits and drawbacks of proposed data center projects, ensuring alignment with regional and national objectives.

Norway’s approach to regulating data centers could serve as a model for other countries grappling with similar issues around technology, energy consumption, and environmental responsibility. The Norwegian government’s proactive measures reflect a commitment to maintaining control over the growth of digital infrastructure while fostering a sustainable and environmentally friendly approach.

The legislation is anticipated to reshape the landscape of data center operations in Norway, potentially discouraging the establishment of new cryptocurrency mining facilities that do not meet the latest regulatory standards. This shift not only affects the crypto mining sector but also sets a precedent for how Norway intends to integrate technological advancements with its robust environmental policies.