Norwegian Government Stops Subsidies for Mining Farms

The country’s leading print media Aftenposten reported that Norwegian data centers today have the same discount as other power-intensive industries. This means that those with a capacity of more than 0.5 megawatts pay 0.48 øre ($0.05) per kilowatt of electric power, instead of 16.58 ($1.72) øre.

Recently, several environmental NGOs have been advocating for a change and reacted to the fact that "mining farms" which mine Bitcoin and other cryptocurrencies benefit from this financial relief.

Earlier this month, it was revealed that Nothern Bitcoin, a German-listed crypto mining company in Norway, is mining Bitcoin at an average cost of $7,700 per coin.

Lars Haltbrekken, a parliamentary representative from the Socialist Left Party, commented:  "Norway cannot continue to provide huge tax decreases for the most energy-consuming form of cryptographic output. It requires a lot of energy and generates large greenhouse gas emissions globally.”

Now the Directorate's proposal is included in the budget agreement between KrF and the government parties, meaning that the power subsidiary will no longer be available in 2019.

Domestic industry interest group ICT Norway reacted strongly to the decision. Roger Schjerva, the Chief Economist of ICT, reported that changing framework conditions without discussion is equal to economic suicide, as crypto miners might relocate to Sweden and Denmark.

On the opposite side, government supporters also made public announcements. Jon Ramvi, CEO of Oslo-based blockchain group Blockchangers, stated that less cryptocurrency mining in Norway would reduce residential costs. Ramvi also added that miners don’t scale the blockchain ecosystem, they only secure the network further.

With recent crypto mining requirements, only “big players” are making some gains, while small mining enthusiasts are mining cryptocurrencies just for fun, as electricity costs went up. The energy costs made negative revenue on smaller crypto miners.