EU Carbon Taxes May Drive Bitcoin Mining to Russia, Study Finds

A recent academic paper indicates that stricter carbon pricing in the European Union (EU) could be prompting Bitcoin miners to move operations to Russia, where carbon costs are absent.

Study Overview

The paper, titled “Does Carbon Pricing Displace Crypto‑Mining Emissions? Quantile Evidence on Carbon Leakage from EU27, Russian and Rest‑of‑World Power Grids,” was authored by Pham Ngoc Toan, Le Tran Trung Hieu, and Nguyen Vu Trung Nguyen. It examined daily power‑sector emissions data from the EU, Russia, and the rest of the world for the period 2019‑2025 and correlated these with Bitcoin’s daily closing price.

Key Findings

• Statistical analysis shows a positive relationship between rising EU carbon allowance prices and increased Bitcoin‑related emissions in Russia.
• The correlation is strongest during off‑peak periods when both Bitcoin prices and EU carbon prices are high.
• No comparable relationship was detected between the EU and other global regions, highlighting a specific link to Russia.

Operational Relocation, Not Physical Moves

The authors note that the study does not track physical relocation of mining hardware. Instead, they suggest that firms operating in both the EU and Russia may shut down rigs in Europe and activate them in Russia to preserve profit margins when EU carbon costs rise.

Policy Context and Limitations

Russia does not currently impose a carbon pricing scheme, making mining there comparatively cheaper. However, the study acknowledges several constraints, including the impact of China’s 2021 mining ban on the observed relationship and the omission of other influencing factors.

Additionally, Russia introduced a crypto‑mining ban in certain regions in 2025, with an expansion to Moscow approved in 2026. This regulatory change could limit the ability of miners to shift operations to Russian jurisdictions.