New York Senator proposes excise tax on crypto mining energy use, aiming to curb emissions, support households, and reshape the mining industry.
New York has reignited debate on crypto mining after State Senator Liz Krueger introduced a bill to impose excise taxes on energy used by mining companies. The proposal, announced Wednesday, reflects increasing state-level pressure to put proof-of-work mining operations under scrutiny due to concerns over the increased use of electricity and costs.
Bill Introduced to Address Rising Energy Burdens
Senate Bill S8518 was co-sponsored by Assemblymember Anna Kelles and Senator Liz Krueger. It aims to introduce a progressive tax on crypto mining companies depending on their annual electricity consumption. Under the plan, firms using up to 2.25 million kilowatt hours (kWh) per year will not have to pay any tax. However, for firms with consumption above this level would pay higher rates based on the level of consumption.
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The legislation sets a 2-cent tax for miners using 2.26 to 5 million kWh annually. Furthermore, it raises the rate to 3 or 4 cents for higher consumption brackets. Companies who used more than 20 million kWh a year would pay the top levy of 5 cents per kWh.
The funds raised under this model would be used to fund New York’s Energy Affordability Programs. These programs are meant to help low and moderate-income households who are experiencing increased costs of utilities. Krueger said the measure protects families from high electricity rates. Moreover, it requires companies to pay their fair share.
By concentrating on large-scale operators, the bill seeks to strike a balance between industrial expansion and household relief. Energy markets, supporters say, will also return to a state of fairness while discouraging miners from using excessive energy with the legislation.
Studies Warn Crypto Mining Could Hit 0.7% of Global CO₂ Emissions by 2027
According to the International Energy Agency’s latest reports, crypto mining and data centres consumed 2% of total global electricity demand in 2022. Demand is now projected to reach 3.5% by 2025, which will place further strain on national grids.
Mining also accounts for a large part of greenhouse gas emissions. It has been reported that the sector currently accounts for almost 1% of global carbon emissions. Analyses show that emissions could increase to 0.7% of global carbon dioxide emissions by 2027 if the expansion in mining is not curbed. These trends support regulatory efforts like that of New York, which look to reduce both environmental and social costs.
The energy cost of mining a single Bitcoin is a measure of the magnitude of the energy expenditure. By July 2025, the figure reached just under 854,400 kilowatt-hours, a massive increase from 104,741 kWh before the halving event in April 2024. This increase is a result of the increased complexity of mining, which demands more computational power and energy inputs.
The growing operational overhead is changing the mining industry, analysts said. However, smaller operators, who are unable to absorb new costs and meet environmental standards, may be liquidated. This may lead to further consolidation, with larger and better-capitalized players taking over the sector. The draft legislation illuminates the role of state-level regulation in shaping the future of worldwide mining markets.
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