Norway Ends Electricity Tax Subsidy For Crypto Mining Firms

News, Regulation | November 23, 2018 By:

The government of Norway has decided to end electricity subsidies for bitcoin and crypto miners.

Currently, crypto mining farms in Norway are qualified for the same reduced electricity rates enjoyed by other power-intensive industries – 0.48 øre ($0.00056) per kilowatt, rather than 16.58 øre ($0.019). However, those subsidies was removed in the recent state budget agreement. As a result, full rates would be applied to the crypto mining sector from January 2019.

“Norway can not continue to provide huge tax incentives for the most dirty form of cryptographic output like bitcoin,” Norwegian parliamentary representative Lars Haltbrekken said. “It requires a lot of energy and generates large greenhouse gas emissions globally.”

Earlier this month Germany-based bitcoin miner Northern Bitcoin reported that the average cost of bitcoin mining in Norway is $7,700 per coin with the current electricity subsidies. The new policy is expected to add further pressure onto the crypto mining industry, which has seen its profits heavily hit by the drastic crypto market downturn.

In an interview with local newspaper Aftenposten, Roger Schjerva, chief economist of ICT Norway, said that the government changed the framework conditions without discussion, consultation or dialogue with the industry.

“Norway scores high on rankings of political stability and predictable framework conditions, but now the government is playing a gambling role with its credibility,” Schjerva said. “With the new tax regime, crypto miners might look to other countries, such as Sweden and Denmark.”