A “sustainable” bitcoin firm has raised money to mine crypto by burning waste coal

A harsh burn
A harsh burn
Image: Kacper Pempel / Reuters
We may earn a commission from links on this page.

How much environmental karma do you earn if you mop up one type of pollution by creating another?

Stronghold Digital Mining, a new, “ESG-friendly” bitcoin-mining firm, uses the electricity from the Scrubgrass Generating Plant in Kennerdell, Pennsylvania, to power its operations. Mining cryptocurrency is notoriously power-thirsty; every year, the bitcoin network generates emissions equivalent to the London metropolitan area, and at least 38% of bitcoin miners around the world use coal as their source of power.

Scrubgrass burns not coal but waste coal—the stuff left over from coal mining, also called “culm” or “tailings.” At least 450 million tons of waste coal sits around in western Pennsylvania; acid runoff from these piles contaminates the land and turns streams red with iron oxides, and the piles themselves are liable to catch fire. By burning this waste coal for electricity, Stronghold claims to “remediate the impacts of 19th or 20th-century coal mining in some of the most environmentally neglected regions of the United States.” On Tuesday, Stronghold announced that it had raised $105 million in funding.

Mining bitcoin with waste-coal power is not climate friendly

But waste coal plants cause horrendous pollution of their own, far worse than that of regular coal plants.

According to figures [.xls] maintained by the Environmental Protection Agency (EPA), Scrubgrass emitted around 405,000 tons of carbon dioxide in 2019, the last year for which data are available. The same year, it produced 241,077 megawatt-hours of electricity. This works out to around 1.67 tons of carbon dioxide emitted per megawatt-hour of power—far more than the US average for regular coal, which is 1.1 tons of carbon dioxide per megawatt-hour.

During the Obama administration, more rigorous emissions standards were imposed on coal-waste power plants, to curb the levels of metals like mercury, acid gases like hydrogen fluoride, and particulate matter spewed out of these plants. Under president Donald Trump, though, the EPA relaxed these standards, allowing Scrubgrass and five other plants in Pennsylvania and Virginia to adhere to looser rules.

All these plants had at first delayed their compliance with the Obama-era law by citing an exemption that usually applies to mining waste, which allows four years “to dry and cover mining waste in order to reduce emissions.” But as an alliance of environmental organizations pointed out in a submission to the EPA, the plants are not “mining waste operations” themselves, and they had no need to dry and cover waste for four years.

Scrubgrass finally began complying with the Obama standard in 2018 but continued to lobby for the standard to be dissolved. The Trump-era relaxation of the rule means Scrubgrass is free to spend less on emissions control—potentially making for cheaper power and worse emissions.

Even without a slide in standards, though, Scrubgrass generates dirtier power than ordinary coal—and ordinary coal is dirty enough as it is. The environmental slogan for coal—”Leave it in the ground”—may not apply to waste coal, which does a lot of damage sitting around in piles of refuse and therefore needs to be cleaned up. “Burn it for bitcoin,” though, is a poor choice of substitute slogan.