Key Takeaways
- A study shows strict EU carbon could be driving bitcoin miners to shift operations to Russia.
- Companies maximize profit by powering down EU rigs and booting up Russian ones during costly times.
- However, new 2025 Russian crypto mining bans could restrict this operational relocation strategy.
Study Suggests High EU Carbon Pricing Causes Mining Migration To Russia
The strict controls that the European Union (EU) exerts over carbon emissions might be a factor in the migration of these industries, at least operationally, to jurisdictions without carbon emissions taxes.
The “Does Carbon Pricing Displace Crypto-Mining Emissions? Quantile Evidence on Carbon Leakage from EU27, Russian and Rest-of-World Power Grids” study, published by Pham Ngoc Toan, Le Tran Trung Hieu, and Nguyen Vu Trung Nguyen, three Vietnamese investigators, examined whether carbon pricing in the EU could be a relevant cause behind bitcoin mining operations moving to Russia.
To this end, the study examined daily power sector emissions from the EU, the rest of the world, and Russia from 2019 to 2025 and linked them to bitcoin daily closing prices.
The results found a statistical correlation between carbon pricing in Europe and carbon emissions in Russia, concluding that bitcoin mining operations “migrate” to Russia at off-peak times when both bitcoin and EU carbon allowance prices grow higher.
The same statistical relationship was not present when examining the same relation between the EU and the rest of the world, making the finding more relevant.
Unlike the EU, Russia has no carbon pricing structure, meaning that mining operations can be more profitable there.
Nonetheless, as the study did not observe physical relocation of mining machinery to Russia, it stresses that the phenomenon might have an operational origin: companies with hardware in both jurisdictions shut down equipment in the EU and turn it on in Russia to maximize their profit margins.
Even so, the study also acknowledges several limitations, including the negative effect of May 2021’s Chinese bitcoin mining ban on the established link and disregard of other relevant factors.
Also, starting in 2025, the Russian government implemented a crypto mining ban in certain regions, with an expansion to Moscow approved this year, which could complicate the operational relocation of these activities to Russia, reducing the possibilities for mining companies.
