China's Inner Mongolia to end cryptocurrency mining, ban new steel, coke projects

BEIJING (Reuters) - China’s Inner Mongolia will end all cryptocurrency mining projects and stop reviewing new projects in industries which consume large amounts of energy, such as steel, coke and methanol production, as it attempts to meet energy efficiency targets.

FILE PHOTO: Representation of the virtual currency Bitcoin is seen on a motherboard in this picture illustration taken April 24, 2020. REUTERS/Dado Ruvic/Illustration

The region was the only one of 30 mainland areas under Beijing’s energy consumption and energy intensity review that failed to meet the targets in 2019, drawing criticism from the central government in September due to its poor achievement.

Now China’s No.2 coal mining region, a major energy consumer, aims to cap energy consumption growth at around 5 million tonnes of standard coal equivalent in 2021, according to a draft rule issued by the regional state planner.

It also plans to cut energy intensity, or the amount of energy consumed per unit of economic growth, by 3% from 2020 levels.

All cryptocrurrency mining projects - which require huge amounts of computing power and hence use large amounts of energy - will be shut down by the end of April this year. Inner Mongolia is an attractive “mining” spot alongside Sichuan and Xinjiang due to low electricity prices.

Small firms with outdated technology in the steel, ferroalloy, coke, graphite electrode and coal-fired power sectors have also been given a timetable to close by the end of 2022.

“(Inner Mongolia) will tighten its energy control measures and bear the targets throughout all economic and social aspects,” said the draft rule, adding it will strictly curb blind expansion at firms which consume a lot of energy.

Local governments in China are scrambling to control energy consumption and improve energy efficiency after President Xi Jinping pledged to achieve carbon neutrality before 2060.

In 2016-2019, energy intensity in Inner Mongolia rose by 9.5% while overall energy consumption grew by 65.62 million tonnes.

The region has also vowed to increase the share of renewable energy in its power portfolio, aiming to install more than 100 gigawatts of renewable generation capacity by 2025.

China appears to have missed its target for cutting energy intensity set for 2016-2020, according to Reuters calculation based on official data.

Reporting by Muyu Xu and Shivani Singh Editing by Kirsten Donovan