A recent study conducted by three Vietnamese investigators indicates that strict carbon emissions controls in the European Union may be driving bitcoin mining operations toward jurisdictions without carbon taxes, such as Russia.
The research, titled “Does Carbon Pricing Displace Crypto-Mining Emissions? Quantile Evidence on Carbon Leakage from EU27, Russian and Rest-of-World Power Grids” and authored by Pham Ngoc Toan, Le Tran Trung Hieu, and Nguyen Vu Trung Nguyen, analyzed daily power sector emissions from the EU, Russia, and the rest of the world alongside daily bitcoin closing prices from 2019 to 2025.
According to the findings, a statistical correlation exists between European carbon pricing and carbon emissions in Russia. The study concluded that bitcoin mining operations shift to Russia during off-peak times when both bitcoin prices and EU carbon allowance prices rise. Notably, this statistical relationship did not appear when examining the EU against the rest of the world.
Because Russia lacks a carbon pricing structure, mining operations can achieve higher profitability there. However, the study notes that the phenomenon may stem from operational strategies rather than the physical relocation of machinery. Companies possessing hardware in both regions reportedly shut down equipment within the EU and activate it in Russia to maximize profit margins during costly periods.
The researchers acknowledged several limitations to their findings, including the disruptive impact of China's May 2021 bitcoin mining ban and the exclusion of other relevant market factors. Furthermore, the study points out that new Russian crypto mining bans introduced in certain regions starting in 2025, along with approvals for expansions near Moscow, could restrict this operational relocation strategy and limit opportunities for mining companies.
