(Bloomberg) – The Nordic region is losing its lead in green bitcoin mining, as is the industry facing growing scrutiny of its carbon emissions and everyone from Elon Musk to mom and pop investors in Iceland, Sweden and Norway have settled popular mining locations because of the abundance of geothermal, water and wind power. China, where most of the coins are mined, is mainly dependent on coal. This Nordic electricity surplus is expected to decrease as aluminum smelters, oil rigs and steelmakers thirst for renewable energy. “There could be very little excess energy in 2021 and 2022,” said Hordur Arnarson, CEO of Landsvirkjun, Iceland’s national utility. “Because of the climate issue, we’re seeing a lot of very interesting segments that are growing rapidly, and some of them need electricity.” The coins are mined by computers that process complex algorithms in halls the size of airport hangars. This makes electricity one of the most important inputs and uses as much electricity as thousands of households. And it keeps growing. Bitcoin mining now uses 66 times more electricity than in 2015, and carbon emissions from the process could face increasing regulation, Citigroup Inc. said in a recently released report. Emissions from mining coins in China are expected to peak in 2024, releasing just as much carbon dioxide, Iceland pioneered green mining, according to a study published in Nature Communications. Up to four years ago it was up to 8% of global Bitcoin production, said the country’s blockchain foundation; today it is less than 2%. The University of Cambridge further reduced the contribution by 0.35% in April 2020. This is the latest available data. For comparison: at that time China accounted for 65%. Growing concerns over China’s influence on cryptocurrency are driving demand for mining locations elsewhere. Kevin O’Leary, chairman of O’Leary Funds Management LP, told CNBC earlier this month that two types of Bitcoin will emerge, “blood coins” from China and “clean coins” that are mined using sustainable hydropower, with provenance of origin and that he would choose the green one. Iceland’s biggest consumers of electricity are the huge huts that were built decades ago to benefit from cheap electricity. According to Landsvirkjun, plants from Rio Tinto Plc and other companies will use more electricity after a slowdown in 2020 due to rising aluminum prices. Bitcoin Rush It is unclear exactly how many cryptocurrency miners are operating in the region. Hive Blockchain Technologies Ltd. from Canada has expanded its mining operations domestically as well as in Iceland and Sweden this year. Genesis Mining Ltd., listed on the Hong Kong Stock Exchange. has offices in Sweden and Iceland. Bitfury Holding BV was also active on the volcanic island. None of them answered questions about the future role of the region. Gisli Kr. Katrinarson, chief commercial officer at AtNorth, Iceland’s largest data center operator and home to some miners, says he doesn’t see a power shortage. When Bitcoin first sailed above $ 60,000 this month, Daniel Fannar Jonsson, CEO at new mining company GreenBlocks, was bullish. Quoting Iceland’s stellar history in the industry, he says that carbon-free electricity is still a big plus. Elsewhere in the Nordic region, new green and energy-intensive industries will produce everything from carbon-free steel to hydrogen and ammonia. Their selling point is that they boost the economy by creating thousands of jobs while helping to reduce emissions. Bitcoin mining, on the other hand, offers society little in return. Bitcoin mining is problematic because “it leads to an almost infinite increase in energy demand,” said Espen Barth Eide, the leading energy legislator for the Norwegian Labor Party. “It will displace other, far more productive industries.” Norway’s electrification program will increase electricity demand by 30% by 2040, according to grid manager Statnett SF. Known as Europe’s green battery due to its enormous hydropower resources, the country is ready to send more electricity to the continent via new cables, which will limit availability for new major users. The Nordic surplus electricity excluding Iceland is expected to shrink 90% from 2023 by the end of the decade, according to industry advisor Volue Insights AS. The new demand will mainly be for hydrogen production and data centers. Rocky Path While Iceland built a separate hydropower plant in 2008 to allow for a new smelter, that courtesy does not extend to Bitcoin miners, according to Arnarson, the utility company, “he said. “There is a lot of uncertainty about future developments.” Cryptocurrencies have emerged as an alternative investment over the past decade, but have been known to blow investors away. A spectacular crash three years ago made it freezing. It was scorned by billionaire investors like Warren Buffett and loved by business people like Musk. It’s cracked again after doubling in value this year. Goldman Sachs Group Inc. and Morgan Stanley plan to offer their clients access to crypto investments. Tesla Inc. announced a $ 1.5 billion investment in Bitcoin earlier this year and is now accepting it as payment for its electric cars. Johann Snorri Sigurbergsson, Business Development Manager at HS Orka Power Plant, says the nation is closer to an energy source than a flood. His company is busy building capacity on the Reykanes peninsula in the southwest. While he’s open to gaining more customers at some point, the price should be “pretty high” right now. “We’d have to buy some energy from the market in order to be able to serve them,” he said. “But that kind of business case isn’t the price the miners are looking for.” More articles like this can be found at bloomberg.com. Sign up now to stay up to date with the most trusted business news source. © 2021 Bloomberg L.P.