In the previous part “About the compatibility of blockchain and GRPD”, Kendrick Nguema tried to demonstrate how this technology, often presented as a lever for energy transition, is already clashing head-on with the requirements of the GDPR: the right to erasure, identification of the data controller, and limitations on data retention periods.
By concluding his analysis with the question, “what if, behind the enticing promises of blockchain, lies an environmental tragedy?”, he paves the way for the second part of the discussion: beyond the issues regarding data protection, is blockchain even compatible with European climate objectives, or does it embody a new form of technological cop out?
The Energy and Climate Incompatibility of Blockchain Technologies under EU Law
The main criticism leveled at blockchain, from a climate perspective, stems from its historical operating method: Proof of Work. This validation mechanism relies on a competition of colossal computing power to solve cryptographic problems, resulting in annual electricity consumption comparable to that of a medium-sized country like Belgium, if we take Bitcoin as an example.
This energy voracity contradicts Directive 2012/27/EU on energy efficiency, which enshrines the principle of optimizing energy use and establishes a common framework for reducing consumption within the Union.
It also clashes with the green taxonomy (Regulation 2020/852), which only allows an activity to be classified as « sustainable » if it contributes to the Union’s environmental objectives without significantly harming them, particularly with regard to mitigating climate change.
This paradox is all the more striking given that many blockchain projects specifically claim to be part of the energy transition: traceability of green certificates, monitoring of guarantees of origin, recording of electricity exchanges between individuals, and management of carbon credits.
Here, the instrument meant to ensure the transparency and reliability of climate commitments ironically relies on a digital infrastructure which, through its consensus model, adds an extra layer of energy consumption to existing information systems.
As long as the electricity mix remains partially carbon-based, this additional demand translates, directly or indirectly, into additional greenhouse gas emissions, which casts doubt on certain project’s claims concerning their relevance in the European’s decarbonization objective.
From technological adaptation to legal regulation: towards a conditional coexistence?
Faced with these criticisms, the ecosystem highlights the emergence of alternative consensus mechanisms, foremost among them Proof of Stake, which drastically reduces energy consumption compared to Proof of Work, as illustrated by transition in 2022.
This technological evolution, often presented as proof that a « green blockchain » is possible, does not, however, solve everything. Many chains remain based on intensive mining, while the overall footprint of data centers, networks, and the equipment necessary for the operation of these infrastructures remains far from negligible.
This controversy, initially confined to crypto-assets, is now extending to other digital technologies, most notably artificial intelligence.
Like Proof of Work, the latest generation of AI models relies on massively parallelized computing power, leading to a massive increase in the energy demand of data centers. Supercomputer projects dedicated to AI, with power outputs measured in hundreds of megawatts, illustrate this headlong rush: a single infrastructure can mobilize the equivalent of a significant fraction of a nuclear reactor’s output, at the very moment when the European Union is calling for a global reduction in energy consumption and associated emissions.
This potential incompatibility, which was only briefly thought about before, becomes a more and more important components in legal terms.
During the MiCA regulation negotiations in 2022, some MEPs proposed excluding Proof-of-Work crypto-assets from the European market due to their carbon footprint, which they deemed incompatible with the EU’s climate targets.
While this ban was not adopted, the compromise reached is not without its implications: issuers and providers must now provide information on the main negative climate and environmental impacts of the consensus mechanism used, as part of the white paper required by MiCA.
Thus, just as we tried to enlighten throughout this two parts, the promise of blockchain technology to serve the energy transition faces a dual constraint: respecting the fundamental rights enshrined in the GDPR and fitting into a truly climate-sustainable development model.
European authorities do not rule out a regulated coexistence, as evidenced by the work of the CNIL (French Data Protection Authority) and the European Data Protection Board, but this coexistence requires arbitrating between the emblematic technical characteristics of blockchain and the imperatives of compliance and energy efficiency.
Therefore, behind the image of a « miracle » technology, lies a much more nuanced reality.
Part 2 :
