Norwegian Government Proposes Elimination of Electricity Tax for Bitcoin Miners

Trygve Slangsvold Vedum, Norwegian finance minister, (photo; Twitter @norwayinUK)

JAKARTA - Trygve Slagsvold Vedum, Norway's finance minister, has suggested the government scrap a scheme that allows crypto data centers to pay lower electricity rates.

In an October 6 announcement, the Norwegian government proposed that data centers operating in the country be subject to the same electricity tax rates as other industries, indicating a potential policy shift for Bitcoin miners.

According to the government, the tariff reduction should be carried out gradually in line with the increasing demand for electricity in certain areas.

“We are in a completely different situation in the electric power market now than when tariff reductions for data centers were introduced in 2016,” the finance minister said.

“In many places, electricity supply is now depressed, which is causing prices to rise. At the same time, we are seeing an increase in cryptocurrency mining in Norway. We need this power for the community,” Vedum said as quoted by Cointelegraph.

Last May, the Norwegian Parliament rejected a proposal to ban crypto mining that was first introduced by the country's Red Party. Jaran Mellerud, an analyst at Arcane Research, told Cointelegraph at the time that Norwegian political parties “are likely to make one more attempt to increase a special electricity tax for miners” with an outright ban unlikely.

Many BTC mining companies currently operate in Norway, use 100% renewable energy sources and account for 0.74% of the global Bitcoin hash rate, according to data from the Cambridge Bitcoin Electricity Consumption Index. However, many of our residents of Sortland in the north of the country have complained about noise pollution from miners and echoed concerns from lawmakers in the United States.

The proposed abolition of the miners' electricity tax rate comes after Vedum's presentation of Norway's national budget for 2023. According to the finance minister, imposing a standard electricity tax rate on miners could generate more than US$14 million in revenue.