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We’re running the most dangerous experiment in history right now, which is to see how much carbon dioxide the atmosphere… can handle before there is an environmental catastrophe.

Last month we launched our Carbon Credit AI, and invited you to submit your questions. Now that this service has been running for a few weeks, it’s becoming increasingly evident that one of the questions you’re most curious about is who issues carbon credits and how, so we decided to write this blog post and give some insights. Hopefully you’ll find this insightful…

 

What is a Carbon Credit?

Climate change is one of the greatest challenges facing our planet today. The burning of fossil fuels and other human activities have led to an increase in greenhouse gas emissions, which in turn has caused global temperatures to rise. This has resulted in more frequent and severe weather events, rising sea levels, and other detrimental effects on the environment.

Carbon credits represent a unit of measurement for greenhouse gas emissions reductions or removals. Carbon credits enable entities to offset their own emissions by investing in ventures that reduce or remove greenhouse gasses from the atmosphere. This not only helps to reduce overall emissions but also promotes sustainable development and the transition to a low-carbon economy.

Carbon credits support climate change mitigation by providing a financial framework of incentives that governs how companies and organizations match their climate change commitments and reduce their emissions.

When a company or organization reduces its emissions below a certain threshold, it can earn carbon credits. These credits can then be sold or traded on carbon markets.

 

Understanding the Carbon Market

The carbon market is a system that enables the buying and selling of carbon credits. It operates on the principle of supply and demand, with some companies and organizations seeking to buy carbon credits to offset their emissions, while others seek to sell their excess credits. The carbon market can be divided into two main types:

  1. Compliance markets
  2. Voluntary markets.

Trading mechanisms in these carbon markets vary depending on the type of market and the specific rules and regulations in place:

Carbon Credit Compliance Markets

Compliance markets are established by governments and are mandatory for certain industries or sectors. These markets use carbon credits as a means of compliance to ensure that companies meet mandatory targets. Carbon credits in these markets are typically allocated or auctioned off by governments, and companies can buy or sell these credits on a secondary market.

Examples of compliance markets are:

 

Carbon Credit Voluntary Markets

Voluntary markets are not regulated by governments and are driven by companies and individuals who voluntarily choose to offset their emissions. Carbon credits for these markets are often generated through projects that reduce or remove greenhouse gasses, and these credits can be bought directly from project developers or through specialized platforms. These markets provide an opportunity for companies to take responsibility for their carbon footprint and demonstrate their commitment to sustainability.

Examples of voluntary markets are:

 

How are Carbon Credits Issued?

Carbon credits can be issued for projects that can be proven to reduce carbon emissions or absorb carbon from the environment. These may include, but are not limited to:

  • Renewable energy initiatives.
  • Energy efficiency programs.
  • Afforestation & reforestation projects.
  • Waste management schemes.

These projects not only help to reduce emissions but also contribute to sustainable development and job creation. By issuing carbon credits for these projects, governments, international organizations and private enterprises can support their implementation and ensure they are financially viable. Let’s take a closer look at how each of the above projects are leveraged to create carbon credits:

 

Issuing Carbon Credits from Wind Farms

By generating clean, renewable energy, wind farms help to reduce the demand for fossil fuels and the associated greenhouse gas emissions. The emission reductions achieved by the wind farm can be quantified and converted into carbon credits, which can then be sold on the carbon market. Carbon Credit Capital offers such credits from our renewable energy partners in India.

 

Issuing Carbon Credits from Afforestation

These projects help to absorb carbon dioxide from the atmosphere and store it in biomass by planting trees. The amount of carbon dioxide absorbed by the trees can be quantified and converted into carbon credits. These credits can then be sold to companies or individuals looking to offset their emissions.

Carbon Credit Capital offers such credits from our forest conservation in Mongolia.

 

Issuing Carbon Credits from Waste Management

Waste management schemes create carbon credits by implementing methods to reduce carbon dioxide and methane emissions associated with waste, typically through activities such as food rescue, plastic recycling, and landfill gas management. Public and private waste management organizations can generate carbon credits that can be traded in carbon markets. This not only helps in environmental conservation but also provides economic benefits through the sale of these credits.

 

Carbon Offset Projects’ Auxiliary and Ancillary Benefits

Carbon offset projects provide multiple benefits beyond emission reductions. They often contribute to sustainable development, create jobs, and support local communities. For example, a renewable energy project can provide clean electricity to remote areas that previously relied on fossil fuels. A reforestation project can create employment opportunities for local communities and protect biodiversity.

By issuing carbon credits for these projects, the carbon market provides a financial incentive for their implementation. This helps to attract investment and support the growth of sustainable practices. Carbon offset projects also contribute to the transition to a low-carbon economy by promoting renewable energy, sustainable agriculture, and other climate-friendly activities.

 

How are Carbon Credits Certified?

The certification process is an essential step in issuing carbon credits and ensuring their credibility and integrity. Certification bodies are responsible for verifying that emission reduction projects meet specific criteria and standards before issuing carbon credits. This process involves a thorough assessment of the project’s methodology, monitoring systems, and emission reduction calculations.

The certification process begins with project developers submitting a project design document (PDD) to the certification body. The PDD outlines the project’s objectives, methodologies, and expected emission reductions. The certification body reviews the PDD and conducts an initial assessment to determine if the project meets the necessary requirements.

If the project is deemed eligible, it moves on to the validation stage. During validation, the certification body conducts an on-site visit to verify that the project is being implemented according to the approved methodology. This includes reviewing monitoring systems, data collection methods, and emission reduction calculations.

Once validation is complete, the certification body issues a validation report and registers the project with a unique identification number. The project can then begin generating carbon credits based on its verified emission reductions. These credits are typically issued in the form of tradable certificates, which can be bought and sold on the carbon market.

Examples of certification bodies include the aforementioned VCS and Gold Standard, as well as the Climate Action Reserve. These organizations have established rigorous standards and guidelines for carbon credit projects and provide independent verification and certification services. By certifying carbon credits, they ensure projects meet the necessary criteria and contribute to real emission reductions.

 

Carbon Credits Verification

Verification is another crucial step in issuing carbon credits and ensuring their credibility and integrity. Verification bodies such as Det Norske Veritas (DNV), SGS, and TÜV SÜD, have extensive experience in verifying emission reduction projects and ensuring compliance with international standards. By providing independent verification services, they help to build trust in the carbon market and ensure the integrity of carbon credits.

 

Carbon Credits Verification process

  1. Verification begins with project developers submitting a verification report including detailed information on the project’s emission reduction calculations, monitoring systems, and data collection methods to the verification body.
  2. The verification body then reviews the report and conducts an independent assessment to determine if the project meets the necessary requirements.
  3. Verification bodies may request additional information or conduct on-site visits to verify a project’s data’s accuracy. This includes reviewing monitoring equipment, data collection procedures, and emission reduction calculations. The verification body also checks for any potential errors or inconsistencies in the project’s documentation.
  4. Once the assessment is complete, the verification body issues a verification statement that confirms the accuracy of the project’s emission reduction calculations. This statement is then used by the certification body to issue carbon credits for the project. The verification body may also provide recommendations for improving monitoring systems or data collection methods to ensure ongoing compliance with standards.

 

Carbon Credits – Government’s Role

Governments play a crucial role in issuing carbon credits and driving emission reductions. They establish policies and regulations that set emission reduction targets for industries and sectors, and they oversee the allocation and trading of carbon credits. Government agencies are responsible for issuing and monitoring carbon credits, ensuring that they are valid and meet the necessary criteria.

Government policies on carbon credits vary from country to country, but they generally aim to incentivize emission reductions and promote sustainable practices. These policies can include cap-and-trade systems, carbon taxes, renewable energy incentives, and other measures that encourage companies to reduce their emissions. By issuing carbon credits, governments provide a tangible incentive for companies to invest in emission reduction projects.

Government agencies responsible for issuing carbon credits also vary depending on the country. In some cases, it may be a dedicated agency or department within the government that is responsible for overseeing the carbon market. In other cases, it may be a regulatory body or an environmental agency that is tasked with monitoring emissions and issuing carbon credits.

 

Carbon Credits – International Organizations’ Role

International organizations play a significant role in issuing carbon credits and reducing emissions on a global scale. These organizations work to establish standards and guidelines for carbon credit projects, provide technical assistance to project developers, and facilitate the trading of carbon credits.

One example of an international organization involved in carbon credits is the United Nations Framework Convention on Climate Change (UNFCCC), which oversees the Clean Development Mechanism (CDM), which allows developing countries to earn carbon credits by implementing emission reduction projects. The CDM has been instrumental in promoting sustainable development and technology transfer in developing countries.

Another example is the International Civil Aviation Organization’s Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA), which aims to offset the growth in international aviation emissions by requiring airlines to purchase carbon credits from approved projects. This initiative is expected to play a significant role in reducing emissions from the aviation sector.

Another important activity by international organizations is the funding and support for carbon credit projects. For example, the World Bank’s Forest Carbon Partnership Facility (FCPF) provides financial incentives for countries to reduce emissions from deforestation and forest degradation. By issuing carbon credits for these projects, international organizations can help to mobilize private sector investment and promote sustainable development.

 

Carbon Credits – Private Enterprises’ Role

As mentioned earlier, private entities and companies are key players in the carbon market, both as buyers and sellers of carbon credits.

 

Private Enterprise Carbon Credit Buyers

Many companies choose to meet compliance requirements, sustainability goals, or corporate social responsibility commitments by electing to offset their emissions through the purchase of carbon credits from projects that reduce or remove greenhouse gasses.

 

Private Enterprise Carbon Credit Sellers

There are also private companies that specialize in issuing carbon credits. The financial model on which these companies operate involves the development and implementation of emission reduction projects similar to the ones listed above through which they earn carbon credits for the attributable emissions reductions. These credits are then sold at a profit on carbon markets.

Examples of private companies issuing carbon credits may include:

  • Renewable energy developers.
  • Waste management companies.
  • Forestry organizations.

Not only do these companies prove the financial incentive for others to make similar investments, and contribute to the transition to a low-carbon economy, but they also play a crucial role in promoting sustainable practices and educating for emission reductions.

 

Private Enterprises’ Role in Education

An important aspect of private companies’ involvement with carbon credits is the promotion of carbon credit projects through marketing and communication efforts – Often companies choose to highlight their carbon offset initiatives for branding purposes, as part of their sustainability strategies, or their corporate social responsibility efforts. These activities help raise awareness and encourage others to follow suit. By showcasing the benefits of carbon credits, private companies can inspire others to join the fight against climate change.

 

Conclusion

Carbon credits are a crucial tool in mitigating climate change and promoting sustainable development. They provide a financial incentive for companies and organizations to reduce their emissions and invest in emission reduction projects. Governments, international organizations, and private companies all play a role in the issuance, certification and validation of carbon credits and thereby driving emission reductions. Certification and verification processes ensure the credibility and integrity of carbon credits, while transparency promotes trust in the carbon market. The future of carbon credits holds great potential for achieving global climate goals and transitioning to a low-carbon economy.

If you’re interested in learning more about carbon credits and their impact on the environment, feel free to reach out to us – We’re always happy to help!

Carbon Footprint

Apple: $94 Billion Record Earnings and the Breakthrough Climate Solutions Fueling Growth

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Apple stock (AAPL) has been on an upward trend, fueled by a mix of strategic investments, strong earnings, and a push toward domestic manufacturing. Investors are taking notice as the tech giant positions itself to reduce tariff risks, strengthen its supply chain, and meet rising demand for its products—all while staying true to its sustainability goals.

The Rise of AAPL Stock: Why and How

Several factors are driving the recent rally in Apple (AAPL) shares. The company’s $100 billion expansion of its U.S. manufacturing program, record-breaking quarterly results, partnerships with domestic suppliers, and commitment to recycled materials have combined to create strong investor confidence.

On top of that, bullish technical signals and potential AI collaborations are adding to the market enthusiasm.

“As of August 14, 2025, Apple Inc. (AAPL) is trading at $233.33 USD on the NASDAQ exchange, reflecting a 1.6% increase (+$3.68) from the previous close.”

APPLE AAPL Stock
Source: Yahoo Finance

Let’s dive deeper into this:

$100 Billion Boost to American Manufacturing

Apple recently pledged an additional $100 billion to expand its U.S. manufacturing footprint, raising its total four-year American Manufacturing Program commitment to $600 billion. This plan includes opening new plants, offering supplier grants, and forming partnerships for key components like glass and chips.

The move is seen as a direct response to trade tensions with Washington, particularly past threats from President Donald Trump to impose a 25% tariff if iPhones weren’t made in the U.S. By increasing domestic production, Apple is improving its standing with policymakers and reducing the risk of costly import tariffs.

Key Partnerships Strengthen U.S. Supply Chain

As per media reports, the manufacturing expansion covers a broad network of U.S.-based suppliers and partners:

  • Corning (GLW): Expanding smartphone glass production in Kentucky.
  • Coherent (COHR): Producing VCSEL lasers for Face ID in Texas.
  • TSMC, GlobalFoundries (GFS), and Texas Instruments (TXN): Collaborating on semiconductor production across Arizona, New York, Utah, and Texas.
  • GlobalFoundries: Manufacturing wireless charging tech in New York.

Apple says this reshoring effort will enable an “end-to-end” chipmaking process in the U.S., from wafers to finished semiconductors. Over 19 billion chips for Apple products will be made domestically this year.

Rare Earth Partnership with MP Materials

Apple is also investing $500 million in MP Materials (NYSE: MP) to secure a long-term supply of rare earth magnets made entirely from recycled materials. These will be processed and manufactured in the U.S., supporting both supply chain resilience and Apple’s environmental commitments.

Apple’s Strong Earnings Fuel Investor Optimism

Apple’s latest earnings report added fuel to the rally. The company posted record June-quarter revenue of $94 billion—up 10% year over year. Product sales hit $66.6 billion, led by strong demand for the new iPhone 16 lineup and Mac computers.

Services revenue rose 13% to $27.4 billion, showing the company’s ability to diversify beyond hardware and generate steady, high-margin income.

Sustainability at the Core of Apple Products

Apple’s stock story also has a purpose. As per its latest sustainability report, in 2024, 24% of all product materials came from recycled or renewable sources, including:

  • 99% recycled rare earth elements in magnets
  • 99% recycled cobalt in batteries
  • 100% recycled aluminum in many cases

Apple avoided 41 million metric tons of greenhouse gas emissions in 2024—equal to taking 9 million cars off the road. The company aims for a 75% emissions reduction from 2015 levels.

apple products
Source: Apple

AI Partnerships Could Add Another Growth Driver

Reports suggest Apple is exploring partnerships with OpenAI and Anthropic to enhance Siri. If successful, these deals could strengthen Apple’s position in the fast-growing AI market.

Can U.S. Manufacturing Plans Keep the Rally Going?

Apple’s reshoring strategy could sustain momentum over the medium term. By resonating with Trump’s “America First” policies and reducing reliance on overseas suppliers, the company is lowering regulatory risks and earning political goodwill.

Nonetheless, challenges remain, but the long-term benefits could outweigh them by securing a more resilient supply chain.

From this analysis, it’s evident that Apple’s recent gains reflect a powerful combination of U.S. manufacturing investments, record earnings, sustainability leadership, and potential AI growth. By strategically aligning with domestic policy and building a stronger supply chain, the company is reducing uncertainty, which is one of the biggest drivers of investor confidence.

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U.S. DOE Reveals $1B Funding to Boost Critical Minerals Supply Chain

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U.S. DOE Reveals $1B Funding to Boost Critical Minerals Supply Chain

The U.S. Department of Energy (DOE) has announced a nearly $1 billion program to strengthen America’s supply of critical minerals and materials. The funding will support mining, processing, and manufacturing within the country. These materials power clean energy technologies and are vital for national security.

This funding builds on President Trump’s Executive Order to Unleash American Energy. It also supports the DOE’s wider Critical Minerals and Materials Program, which focuses on boosting U.S. production, expanding recycling, and strengthening supply chain security.

U.S. Secretary of Energy Chris Wright remarked:

“For too long, the United States has relied on foreign actors to supply and process the critical materials that are essential to modern life and our national security. Thanks to President Trump’s leadership, the Energy Department will play a leading role in reshoring the processing of critical materials and expanding our domestic supply of these indispensable resources.”

From Mines to Magnets: Where the $1B Goes

The DOE’s $1 billion plan targets key minerals like lithium, cobalt, nickel, and rare earth elements. These are essential for electric vehicle batteries, wind turbines, solar panels, and advanced electronics used in defense systems.

The funding is split across several areas:

  • $500 million to the Office of Manufacturing and Energy Supply Chains (MESC) for battery material processing, manufacturing, and recycling projects.
  • $250 million to the Office of Fossil Energy and Carbon Management to support facilities producing mineral byproducts from coal and other sources.
  • $135 million to boost rare earth element production by extracting them from mining waste streams.
  • $50 million to refine materials like gallium, germanium, and silicon carbide, which are crucial for semiconductors and high-performance electronics.
  • $40 million through ARPA-E’s RECOVER program to extract minerals from industrial wastewater and other waste streams.
DOE’s $1 Billion Critical Minerals Initiative
Source: U.S. DOE

By investing from extraction to refining, the DOE aims to reduce reliance on foreign suppliers, especially those in politically unstable regions. The plan also encourages public–private partnerships to scale production faster.

Why Critical Minerals Matter for America’s Future

Critical minerals lie at the heart of America’s economic transformation and defense strategy. In recent years, demand for lithium, cobalt, nickel, and rare earth elements has grown. This rise comes as clean energy technologies become more important.

The U.S. imports more than 80% of its rare earth elements, and most of this comes from one country – China. This heavy reliance creates risks during trade or geopolitical tensions.

US rare earth import from China

The Trump administration has placed strong emphasis on closing this vulnerability. In March 2025, an executive order highlighted critical minerals as vital for national defense. It also set timelines to boost U.S. production and processing capacity. This aligns with broader economic priorities, including clean energy jobs, green infrastructure, and domestic manufacturing.

The Inflation Reduction Act and infrastructure programs have unlocked billions in grants and tax credits. These funds support electric vehicle manufacturing, battery plants, and renewable energy projects.

The DOE’s $1 billion critical mineral fund supports programs by focusing on materials essential for the clean energy economy. Also, by reusing existing industrial facilities to recover minerals instead of building entirely new ones, the DOE can speed up progress and reduce costs.

EV production is expected to grow faster than any other sector, with demand for minerals likely to be more than 10x higher by 2050. This surge will transform the global supply chain and is critical for the global Net Zero aspirations.

Mineral demand for Electric vehicles in the Net Zero Emissions by 2050 Scenario
Source: IEA

The combined impact of industrial strategy, financial incentives, and supply chain investments shows a clear push to:

  • Move production back onshore,
  • Boost innovation in materials recycling,
  • Support the energy transition, and
  • Cut down on foreign imports.

Building on Early Wins

The DOE’s new $1 billion investment boosts earlier funding for critical minerals. This aims to strengthen U.S. industrial capacity.

In 2023, the Department gave $150 million to various clean mineral projects. These include direct lithium extraction in Nevada and early-stage nickel processing partnerships in Oregon.

Since 2021, DOE has invested more than $58 million in research. This work focuses on recovering critical minerals from industrial waste or tailings. They are turning by-products into valuable feedstock.

These R&D projects created pilot facilities. They show how to recover lithium from geothermal brines and rare earths from coal ash. This approach models resource use without needing new mining.

Built on these early successes, the new $1 billion fund signals a shift from pilot programs to scaling proven technologies. It allows U.S. manufacturers to pivot from lab-scale experiments to full commercial operations. 

For example, lithium recovery projects are moving from test sites to large extraction facilities. This shift is supported by the technical help from DOE’s national labs.

Likewise, battery recycling pilots are set to grow. More recycling centers are being planned in the Midwest and Southwest.

This funding approach provides continuity. It supports U.S. firms from basic research to commercialization. This helps them quickly move from proof-of-concept to production-ready operations. It also reassures private investors that government backing is strategic and sustained.

McKinsey projects that developing new copper and nickel projects will require between $250 billion and $350 billion by 2030. By 2050, the broader critical minerals sector could grow into a trillion-dollar market to support the net-zero or low-carbon transition.

raw materials supply for low-carbon transition

Washington’s Backing, Industry’s Buy-In

Political backing for the domestic minerals strategy is strong. A recent executive order aims to speed up mining permits and provide federal support.

The Defense Department has also invested $400 million in MP Materials, the largest stakeholder in the only U.S. rare earth mine. This deal includes a new plant to produce magnets for electronics and defense applications.

Industry players are moving in the same direction. Battery maker Clarios is exploring sites for a $1 billion processing and recovery plant in the country. These moves show a shared goal between government and industry to rebuild America’s mineral supply chains.

Opportunities—and the Roadblocks Ahead

The DOE’s program offers major opportunities:

  • Less reliance on foreign countries for essential materials.
  • Creation of high-quality U.S. jobs.
  • Growth in recycling and recovery technologies.

However, challenges remain. Mining and processing must be done without harming the environment. Technology costs need to stay competitive. And benefits must be shared fairly with local and Indigenous communities.

Amid all this, the global race for critical minerals is intensifying. Many countries are already securing their own supplies. The U.S. wants to close its supply gap and become a leader in clean energy manufacturing.

The DOE’s nearly $1 billion plan is a key step toward reshoring America’s critical minerals industry. It builds on earlier successes and aligns with private investments and new policies. If successful, it could make U.S. supply chains more secure, support the clean energy transition, and strengthen national security.

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Bitcoin Price Hits $124,000 Record High vs Ethereum Price Near $4,800: Which Crypto Is Greener?

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Bitcoin Hits A New Record, Ethereum Nears Its Peak: But Which Is Greener?

Bitcoin price just smashed through $124,000 while Ethereum is closing in on its $4,800 record, fueling fresh excitement in the crypto market. But beyond price charts, the two blockchains have sharply different environmental footprints.

One still runs on an energy-hungry proof-of-work system, while the other has reinvented itself with a proof-of-stake model that slashes energy use by over 99%. The question for climate-minded investors: which crypto comes out greener? Let’s find out.

Crypto’s New Highs, Old Questions

Bitcoin price surged past $124,000 upon writing, setting a new all-time high. Analysts credit several factors:

  • strong institutional buying,
  • increased inflows into Bitcoin ETFs,
  • favorable regulatory changes allowing crypto assets in 401(k) retirement accounts, and
  • growing market optimism over expected Federal Reserve interest rate cuts.
Bitcoin all time high $124,000
Source: AlphaFlipper

The rally reflects both a recovery from previous market downturns and a renewed appetite for digital assets among mainstream investors.

Ethereum, the second-largest cryptocurrency by market capitalization, is also on the rise. It is now approaching its all-time high of around $4,800, last seen in November 2021.

ethereum near record high

Investor sentiment is rising because of Ethereum’s role in decentralized finance (DeFi) and NFT marketplaces. Its better environmental profile, thanks to the switch to a proof-of-stake (PoS) model, also helps.

With both tokens in focus, let’s look at their energy use and carbon footprint. This matters for investors and policymakers who care about their climate and environmental impact.

How Bitcoin’s Proof-of-Work Consumes Energy

Bitcoin’s network runs on a process called proof-of-work (PoW). Miners around the world compete to solve complex mathematical puzzles. The first to solve it gets to add a block of transactions to the blockchain and earn newly minted Bitcoin. This process secures the network but demands enormous computing power.

That computing power uses a lot of electricity. Bitcoin’s annual energy use is estimated at about 138–178 terawatt-hours (TWh). This is similar to the electricity consumption of countries like Poland or Thailand, and even greater than Norway.

The carbon footprint is equally large, at around 40 million tonnes of CO₂ equivalent per year. To put that into perspective, that’s similar to the emissions of Greece or Switzerland.

On a per-transaction basis, a single Bitcoin payment can use as much energy as a typical U.S. household does in one to two months.

Bitcoin energy use versus countries
Source: Statista

Beyond electricity, Bitcoin mining also generates significant electronic waste. Specialized mining hardware, called ASICs, becomes obsolete quickly—often within two to three years—because faster, more efficient models keep being developed. This turnover contributes thousands of tonnes of e-waste annually.

Ethereum’s Post-Merge Energy Transformation

Before 2022, Ethereum also used proof-of-work, with high energy demands. But in September 2022, the network completed the Merge, switching to proof-of-stake.

Ethereum now uses validators instead of miners. These validators “stake” their ETH tokens as collateral. This helps confirm transactions and secure the network.

This change cut Ethereum’s energy use by over 99.9%. Today, the network consumes an estimated 2,600 megawatt-hours (MWh) annually—roughly 0.0026 TWh. That’s less electricity than a small town of 2,000 homes might use in a year.

The carbon footprint is also tiny compared to Bitcoin—under 870 tonnes of CO₂ equivalent annually. That’s about the same as the yearly emissions of 100 average U.S. households. In environmental terms, Ethereum has gone from being one of the largest blockchain energy consumers to one of the most efficient.

Ethereum carbon footprint
Source: Ethereum

Beyond Electricity: Hidden Environmental Costs

While electricity use is the biggest factor, it’s not the only environmental concern for both cryptocurrencies. Here are the other environmental impacts:

  • Water Use:
    Large-scale Bitcoin mining facilities often require substantial cooling, which can consume millions of liters of water annually. This can put pressure on local water supplies, particularly in drought-prone regions. Ethereum’s low energy profile greatly reduces such needs.
  • Heat Output:
    Mining facilities generate significant heat. In some cases, waste heat is reused for industrial or agricultural purposes, but in most situations, it is simply released into the environment, adding to local thermal loads.
  • Land and Infrastructure:
    Bitcoin mining operations require large warehouses and access to high-capacity electrical infrastructure. This can limit available industrial space for other uses and put stress on local grids.

By using proof-of-stake, Ethereum avoids most of these impacts. It just needs standard server equipment. This can run in data centers with other low-impact computing tasks.

bitcoin versus ethereum carbon footprint

How the Industry Is Addressing Bitcoin’s Footprint

The crypto industry is aware of Bitcoin’s environmental challenges and is taking steps to address them. Some of the actions taken include:

  • Renewable Mining: Some mining operations use only hydro, wind, or solar energy. This is common in areas with plenty of renewable resources.
  • Waste Heat Recovery: A few miners capture and reuse waste heat for agriculture (e.g., greenhouse farming) or district heating systems.
  • Carbon Offsetting: Companies and mining pools are buying carbon credits to offset emissions. However, how well this works depends on the quality of those credits.
  • Policy Proposals: Governments may require Bitcoin miners to share their energy sources or meet renewable energy goals.

SEE MORE: Top 5 Sustainable Bitcoin Mining Companies To Watch Out For

While these efforts are promising, the core challenge remains: proof-of-work’s high energy requirement is built into Bitcoin’s security model.

Why This Matters for ESG-Minded Investors

For investors who care about environmental, social, and governance (ESG) factors, the difference between Bitcoin and Ethereum is stark. Ethereum’s low-energy proof-of-stake model makes it easier to align with climate goals. Bitcoin’s high energy use and emissions, while partially mitigated by renewable adoption, remain a significant concern.

These factors may influence where ESG-focused funds allocate capital. Companies and institutions wanting exposure to blockchain technology without a large carbon footprint might prefer Ethereum or other PoS networks.

Bitcoin may still attract investors because of its market dominance and value as a store. However, it will likely keep facing environmental concerns.

The Road Ahead for Crypto and Climate

Bitcoin and Ethereum’s price rallies show that investor interest in crypto remains strong. As climate change and sustainability gain importance in policy and investment, environmental performance may play a larger role in the long-term value and acceptance of digital assets.

For now, Ethereum sets the standard for energy efficiency among major blockchains, while Bitcoin represents the ongoing challenge of balancing security, decentralization, and sustainability. Can Bitcoin cut its environmental impact without losing its key features? This will be an important question in the coming years.

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