In the environmental impact assessment required by the Crypto-Asset Markets Regulation (MiCA), the Crypto Carbon Ratings Institute (CCRI) released detailed sustainability metrics for the Cardano blockchain. CCRI has partnered with the Cardano Foundation to develop a sustainability assessment that provides detailed insight into the network’s energy consumption, carbon emissions, waste production, and its broader environmental impact, serving as a check on compliance with the latest regulatory standards from the European Securities and Markets Authority (ESMA).
Cardano is ready for MiCA
Cardano’s infrastructure, running on a Proof of Stake (PoS) protocol called Ouroboros, shows significant reductions in energy consumption compared to customary Proof of Work (PoW) networks. The annual energy consumption of the Cardano network is 704.91 MWh. In comparison, customary PoW networks like Bitcoin consume an incomparably larger amount of energy, often equal to the production of miniature countries, the report notes.
Cardano’s total annual carbon dioxide emissions are calculated at 250.73 tonnes of CO2 equivalent. The carbon intensity, which measures emissions per unit of electricity consumed, is 356 grams of CO2 per kWh. This figure indicates the types of energy sources used by the network, reflecting a mixed reliance on both renewable and non-renewable resources.
The CCRI report states: “We found the total annual carbon footprint for the Cardano network to be 250.73 tCO2e. The carbon intensity of the electricity consumed is 356 gCO2 per kWh, suggesting a marginal but necessary focus on more renewable energy sources to further reduce this value.”
One of the fresh metrics introduced by the MiCA framework is the measurement of waste production, with a focus on electronic waste. The Cardano network generates approximately 8.26 tons of waste electrical and electronic equipment (WEEE) per year. 51.93% of this is not recycled, indicating room for improvement in waste management practices throughout the life cycle of network equipment.
The report delves into the impact of network operations on natural resources, including critical raw materials required to manufacture hardware components. These materials are often sparse and have significant extraction costs, both environmentally and economically. Network energy consumption also has an indirect impact on water consumption, particularly in regions where non-renewable energy sources dominate and water is largely used for cooling in power generation.
Under MiCA regulations, which came into effect in June 2023, all cryptoasset service providers are required to provide comprehensive environmental impact disclosures. CCRI’s detailed report on Cardano not only complies with these requirements, but also sets a precedent for transparency in reporting sustainability metrics in the crypto industry.
The Cardano network, at the time of reporting, is running 3,147 nodes and has processed an annualized number of 19,530,055 transactions. This operational data is crucial to understanding the physical infrastructure of the network and its environmental load. The average power per node is 25.576 watts, and the total network power is 80.47 kW. The power demand per transaction per second (TPS) is 0.192 W.
Overall, the CCRI report provides significant insight into Cardano’s environmental profile and its alignment with global sustainability goals. As the cryptocurrency industry faces increasing scrutiny over its environmental impact, assessments like these will be crucial for investors, regulators, and the broader community to make informed decisions about blockchain sustainability.
At the time of going to press, the ADA rate was $0.41.
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