How will Tesla’s bitcoin investment affect its carbon footprint?

Tesla electric cars don’t produce “tailpipe” emissions, but a new investment by the automaker could negatively affect its overall carbon footprint. On Monday, Tesla announced that it had bought $1.5 billion of the cryptocurrency bitcoin, and would soon accept bitcoin as payment for its cars. But bitcoin is estimated to produce more carbon emissions annually […]

Tesla electric cars don’t produce “tailpipe” emissions, but a new investment by the automaker could negatively affect its overall carbon footprint.

On Monday, Tesla announced that it had bought $1.5 billion of the cryptocurrency bitcoin, and would soon accept bitcoin as payment for its cars. But bitcoin is estimated to produce more carbon emissions annually than entire countries, Reuters noted.

That’s because bitcoin is generated by processing complex mathematical transactions on powerful computers. And bitcoin “mining” uses a lot of electricity—the same amount used by the Netherlands in 2019, according to Reuters, which cited University of Cambridge and International Energy Agency data.

Bitcoin mining is estimated to generate between 22 million and 22.9 million metric tons of carbon dioxide emissions per year, similar to the amounts produced by Jordan and Sri Lanka, the report noted, citing a 2019 study in the scientific journal Joule.

2021 Tesla Model S Plaid+

2021 Tesla Model S Plaid+

The potential environmental impact of bitcoin mining has been known for some time. Even in 2018, it was estimated that processing bitcoin used more electricity than all Tesla electric cars then on the road. Yet Tesla isn’t alone in embracing cryptocurrency: Karma Automotive began accepting bitcoin as payment for its plug-in hybrids in 2019.

The Reuters report noted that projects are underway to reduce emissions from bitcoin mining by using more sustainable power sources. Investors may also choose to pay a premium for green bitcoin, boosting its value, the report noted. But those efforts have yet to gain traction, and in the meantime Tesla’s investment has sent the price of bitcoin through the roof.

Like other automakers, Tesla does track carbon emissions related to its operations as well as its vehicles. The company released its first sustainability report—called an Impact Report—in 2019, although it didn’t release one in 2020. It’s unclear what—if any—plans Tesla has to offset the carbon emissions from its bitcoin purchase.

CEO Elon Musk is a fan of the carbon tax, so perhaps it should apply here? At any rate, Tesla should include bitcoin mining in future sustainability reports so that owners can know the true carbon footprint of their electric cars—or at the very least, the financing behind them.