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London-listed crypto miner Argo signs climate accord

Bitcoin ATM near main railway station in Krakow, Poland on May 2nd, 2021. (Photo by Beata Zawrzel/NurPhoto via Getty Images)
The companies will deploy new technologies that 'increase the transparency of the renewable energy sourcing of crypto mining'. Photo: Beata Zawrzel/NurPhoto via Getty Images

UK-listed bitcoin mining business Argo Blockchain (ARB.L) and cryptocurrency technology company DMG Blockchain Solutions (DMGI.V) have signed a "crypto climate accord" (CAA) aimed at promoting industry decarbonisation.

The CAA outlines several objectives for the crypto mining industry, including reaching net-zero emissions from electricity consumption by 2030. The pair are among the first cryptocurrency firms to sign up to the CCA, the pair said in a statement.

Under the terms of the agreement, the companies will deploy new technologies to "increase the transparency of the renewable energy sourcing of crypto mining".

The CAA — a private sector-led initiative with 40 signatories including 20 prominent cryptocurrency companies — also aims to transition the sector to net-zero greenhouse gas emissions by 2040.

The initiative will develop standardised tools and technology to "accelerate the adoption and verification of 100% renewables-powered blockchains" under the United Nations Framework Convention on Climate Change (UNFCCC).

"As more data continues to surface regarding bitcoin and bitcoin mining's impact on the environment, it's imperative that the industry takes real, tangible action," Argo's chief executive Peter Wall said.

Watch: What are the risks of investing in cryptocurrency?

Read more: Argo buys hydro-powered crypto mines in Quebec as Tesla ditches bitcoin

Argo, which focusses on large-scale cryptocurrency mining, has been on a clean energy drive recently. It signed a preliminary deal with DMG to create the world's first "green" bitcoin (BTC-USD) mining pool earlier this year. The company this week bought hydro-powered crypto mines in Quebec, Canada.

Shares in Argo were trading 11% higher to £150 on Friday midday in London.

Chart: Yahoo Finance
Chart: Yahoo Finance

Sheldon Bennett, DMG's chief executive, said his company was "committed to transparency" and the partnership put "the wheels in motion to transition the cryptocurrency industry into one that focuses on renewable energy."

Read more: Bitcoin falls below $50,000 as Elon Musk doubles down on climate criticism

The news come amid mounting criticism over the energy used by the crypto industry and its potential impact on climate change. According to Cambridge University, bitcoin mining accounts for 0.7% of global electricity consumption. Much of the power comes from coal-fired plants in China.

On Wednesday evening, Tesla boss Elon Musk expressed concerns about how much energy the technology uses and reversed plans for his electric car company to accept bitcoin.

"We are concerned about rapidly increasing use of fossil fuels for bitcoin mining and transactions, especially after coal, which has the worst emissions of any fuel," Musk tweeted.

Tesla's announcement led bitcoin to crash 13%. Other major cryptocurrencies — including Ethereum (ETH-USD), Dogecoin (DOGE-USD) and Litecoin (LITE-USD) — followed suit.

Argo, swung to a profit last year after it was boosted by surging bitcoin and cryptocurrency prices. The company made a net profit of £1.7m ($2.4m), compared to a £0.7m net loss in 2019. Revenue rose 120% to £19m.

Watch: What is bitcoin?