Energy-related ESG Metrics
This disclosure is published in accordance with the Principle Adverse Impact (PAI) requirement under the Commission Delegated Regulation (EU) 2025/422 published on March 31, 2025, that specifies the content, methodologies, and presentation of information regarding climate and environmental impacts for crypto-assets under the Markets in Crypto-assets Regulation (MiCA) (EU) 2023/1114.
Although CF Technologies does not issue any digital assets, the Company recognizes its’ obligation as a crypto asset service provider to disclose information related to the principal climate and environmental adverse impacts associated with the consensus mechanisms of the crypto assets made available to its customers.
Environmental Considerations of Consensus Mechanisms
1. Energy Consumption
Consensus mechanisms such as Proof-of-Work (PoW) (e.g., Bitcoin) rely on miners performing complex computational tasks to validate transactions and secure networks. These operations are highly energy-intensive, often exceeding 500,000 kWh as network participation increases.
By contrast, Proof-of-Stake (PoS) mechanisms (e.g., Ethereum, Tron, Solana, FastToken) are significantly more energy-efficient, typically consuming below 500,000 kWh, thereby offering a lower environmental footprint.
2. Carbon Emissions
The carbon intensity of PoW networks depends heavily on the energy mix used by miners. In regions reliant on fossil fuels, mining contributes substantially to CO₂ and greenhouse gas emissions. Even where renewable energy sources are available, miners often operate on mixed grids that include non-renewable components.
In contrast, PoS and other modern consensus mechanisms achieve markedly lower emissions per transaction due to their minimal energy requirements.
3. Electronic Waste (E-Waste)
PoW mining requires specialized hardware that becomes obsolete as mining difficulty increases and more efficient models emerge. This leads to the generation of electronic waste (e-waste), much of which is difficult to recycle and frequently ends up in landfills. PoS systems, requiring no dedicated mining equipment, mitigate this issue almost entirely.
While no blockchain is entirely free from environmental impact, ongoing innovation, governance improvements, and renewable energy integration are essential to building a more sustainable digital asset ecosystem.
ESG data sheets by cryptocurrency
Each sheet sets out the sustainability indicators for one crypto-asset available on Xcoins, in the format required under MiCA. Download the PDF for the asset you are interested in.
