(The Center Square) – An appeal is expected from a Connecticut company after New York regulators denied the renewal of a power plant permit to a cryptocurrency mining operator.
On Thursday, the State Department of Environmental Conservation said granting a permit to Greenidge Generation for its plant in Torrey, a Finger Lakes community 50 miles southeast of Rochester, would go against the state’s Climate Act and its standards on greenhouse gas emissions.
“Among the factors considered was the dramatic increase in greenhouse gas emissions from the facility since the passage of the Climate Act, driven by the change in the primary purpose of its operations,” the department’s statement read. “Rather than solely providing energy to the state’s electricity grid, the power plant now primarily provides energy behind-the-meter to support the demands of Greenidge’s energy-intensive proof of work cryptocurrency mining operations.”
The Connecticut-based company issued a statement after the ruling noting that its operations would not stop immediately because it believes “an unbiased court system” will overturn what it called an “arbitrary and capricious decision.”
Greenidge also claimed the DEC never communicated with it over the last three months regarding the permit, even after it proposed reducing emissions by an additional 40% within the next three years and becoming a zero-carbon facility by 2035.
“They chose to pass up the opportunity to materially improve the environment, choosing instead to burden New York taxpayers with the expense of funding a lengthy administrative and judicial battle that could have easily been avoided,” the statement read.
Cryptocurrency is a decentralized digital form of money. It’s created or mined through computers conducting complex tasks, which require high volumes of energy.
New York has become a leading state for mining Bitcoin, the most well-known type of cryptocurrency. According to data from the Columbia Climate School at Columbia University, about 35% of all Bitcoin is mined in the U.S.
New York ranks third in production, responsible for about 9.5% of the coins mined in the United States.
However, there have been calls for the state to limit the use of fossil fuels in cryptomining. The Legislature passed a bill before its session ended last month that would establish a two-year ban on new mining operations that needed fossil fuel permits. It would not impact existing operations.
While environmental groups are persuading Gov. Kathy Hochul to sign the bill into law, industry groups, like the Blockchain Association, have called on her to veto it because they say it would not have the intended environmental effect since companies would invest in new mining facilities elsewhere.
John Olsen, the state lead for the Blockchain Association, told The Center Square in a statement Friday that the DEC’s ruling shows there’s no need for a moratorium.
“This decision confirms the fact the executive branch already has the power to act on a case-by-case basis on the issue of mining,” Olsen said. “A blanket law that picks winners and losers in an emerging tech space is bad for innovation – and redundant.”