Exceeds Elon Musk’s Threshold for Resuming Tesla’s BTC Payments

According to a new study from Cambridge University, sustainable energy sources in the Bitcoin mining industry have reached 52.4% — a significant increase from 37.6% in 2022. This figure exceeds the 50% threshold previously identified by Elon Musk as a necessary condition for Tesla to resume accepting Bitcoin as payment for its vehicles. The study also revealed substantial changes in the energy consumption structure of the mining industry, with natural gas replacing coal as the primary energy source, signaling the industry’s continuing transformation toward more environmentally friendly practices.

Transformation of Bitcoin Mining’s Energy Mix

The report from the Cambridge Centre for Alternative Finance (CCAF) at Cambridge Judge Business School, published Monday, represents one of the most comprehensive studies of the mining industry’s energy profile. According to the data, 9.8% of sustainable energy used in mining comes from nuclear power, while 42.6% comes from renewable sources such as wind and hydropower.

Particularly noteworthy is the changing role of traditional fossil fuels. Natural gas, which is considered less polluting compared to coal, has increased its share to 38.2% from 25% in 2022, while coal use has dramatically decreased to 8.9% from 36.6% over the same period.

“This transformation of the energy mix reflects both economic and environmental factors influencing miners’ decisions,” notes Alexander Neumueller, Research Lead for Digital Assets Energy and Climate Impact at the CCAF. “The growth in natural gas usage is partially linked to the development of flared gas utilization practices, which would otherwise be burned off, presenting a double benefit for the environment.”

The study is based on a survey of 49 mining firms, including 41% publicly listed, with operations across 23 countries — including major players like Bitfarms, CleanSpark, Hut 8, IREN, MARA, and Riot. These companies collectively represent about 48% of global Bitcoin mining activity by hashrate, making the sample sufficiently representative of the industry as a whole.

Key Performance and Environmental Impact Metrics

The CCAF estimates the Bitcoin network’s annual electricity consumption at 138 terawatt-hours, or roughly 0.5% of global usage. Emissions are estimated at 39.8 megatonnes of CO2 equivalent, despite a 24% year-over-year improvement in hardware efficiency.

“It’s important to note that the rate of efficiency improvements in mining equipment continues to accelerate,” comments Maria Rodriguez, a cryptocurrency infrastructure analyst. “New generations of ASIC miners demonstrate significant improvements in hashrate-to-energy-consumption ratios, allowing the industry to increase computational power without a proportional increase in energy consumption.”

The study also addresses the often-ignored aspect of electronic waste. Miners reported that 86.9% of decommissioned hardware is resold, repurposed, or recycled. The CCAF estimates that Bitcoin mining generated about 2.3 kilotonnes of e-waste in 2024 — a figure significantly lower than some previous estimates.

Geographic Trends and Mining Economics

The study confirms North America’s dominant role in Bitcoin mining, with the US accounting for 75.4% of reported activity and Canada following at 7.1%. However, there is also emerging activity in South America and the Middle East, alongside ongoing operations in Northern Europe.

From an economic perspective, electricity makes up over 80% of miners’ operating expenses, with median reported costs of $45 per MWh for power, and $55.50 per MWh including all expenses. These figures underscore why access to cheap energy remains a key competitive factor in the industry.

An interesting aspect revealed in the report is the role of miners as flexible electricity consumers that can help grid operators during times of high demand. In 2023 alone, miners curtailed 888 GWh of electrical load, demonstrating the potential of mining as a tool for balancing power grids.

“The ability of miners to rapidly curtail consumption during peak demand periods creates a symbiotic relationship with grid operators,” explains John Smith, strategy director at a major mining company. “This helps prevent blackouts and contributes to the overall stability of energy infrastructure.”

Competing Narratives: Conflicting Studies

The CCAF report comes on the heels of a recent Harvard-led study on Bitcoin mining’s environmental impact, which was criticized by energy experts as “deeply flawed.”

That study, published in Nature Communications, argues that Bitcoin mining in the US significantly contributes to harmful air pollution, with 1.9 million Americans exposed to increased levels of fine particulate matter. The researchers tracked 34 of the largest US Bitcoin mines, claiming they consumed 32.3 TWh of electricity — 33% more than the city of Los Angeles — 85% of which from fossil fuels.

In response, Daniel Batten, an expert in energy and environmental sustainability, particularly in the context of Bitcoin mining, called the study “deeply flawed,” suggesting that it “looks like the conclusion was ‘Bitcoin mining must look bad’ then went looking to find data and methodologies that supported that.”

The Digital Assets Research Institute (DARI) also published a formal rebuttal of the Harvard-led paper, finding similar issues to Batten.

“Despite [Bitcoin mining’s] impressive growth, the rapid transformation has outpaced transparent, empirical data collection, often leaving policymakers, researchers and the public reliant on outdated assumptions or anecdotal information,” the CCAF report authors stated on Monday.

Implications for Tesla and Elon Musk’s Policy

One of the most interesting aspects of the CCAF report is that the 52.4% sustainable energy figure exceeds the threshold set by Elon Musk for resuming Bitcoin acceptance for Tesla payments.

In 2021, after initially embracing Bitcoin and announcing a $1.5 billion cryptocurrency purchase, Tesla suspended vehicle purchases using Bitcoin due to concerns about the environmental impact of mining. “We are concerned about the rapidly increasing use of fossil fuels for Bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel,” Musk said at the time.

He subsequently clarified the conditions for returning to Bitcoin acceptance: “When there’s confirmation of reasonable (~50%) clean energy usage by miners with a positive future trend, Tesla will resume allowing Bitcoin transactions.”

According to Bitcoin Treasuries data, Tesla still holds 11,509 BTC, worth around $1.1 billion, with an average cost basis of $33,539 and an unrealized gain of 183.4%. Nevertheless, the company has yet to announce any resumption of the Bitcoin payment option, despite the new data showing the threshold set by Musk has been exceeded.

“Tesla’s decision will carry significant symbolic weight for Bitcoin’s perception as an environmentally responsible asset,” believes Elena Kovaleva, head of research at a cryptocurrency exchange. “Resuming Bitcoin acceptance could serve as a signal for other corporations considering cryptocurrency integration into their business models.”

Conclusion: Changing Perceptions and Regulatory Future

The CCAF report represents an important contribution to the evolving perception of Bitcoin’s environmental impact. The authors stressed that the study is only a starting point, with more research needed on issues like methane mitigation, heat reuse, and broader social impacts such as job creation.

“This [CCAF] report directly addresses a persistent data gap by relying on direct practitioner insights rather than abstractions,” Alexander Neumueller noted. “By offering a granular perspective based on data covering nearly half the global mining activity, we aim to anchor the debate on robust, transparent evidence and inform grounded policy discussions about this rapidly evolving industry.”

Ongoing data collection will be essential to support informed policymaking that balances innovation with environmental responsibility. As the mining industry continues to evolve, the emergence of more accurate and comprehensive data like that presented in the CCAF report may help bridge the gap between often polarized positions in debates about cryptocurrency’s environmental impact.

For investors and industry participants, this research provides valuable insight into the direction of Bitcoin mining, where the trend toward more sustainable practices not only addresses environmental concerns but also potentially opens up new opportunities for business and innovation in the renewable energy sector.