Senate Bill Targets Crypto Mining, AI Data Centers with Climate Penalties

A new U.S. Senate proposal has been introduced to curb the energy consumption of data centers, including those used for cryptocurrency mining and AI infrastructure. The Clean Cloud Act, sponsored by Democratic Senators Sheldon Whitehouse and John Fetterman, aims to impose emissions limits and financial penalties on facilities that exceed federally set environmental benchmarks.

The bill would require the Environmental Protection Agency (EPA) to set an emissions performance standard for data centers with over 100 kilowatts of installed IT capacity. These standards would be regionally based and would require an 11% annual emissions reduction. Facilities exceeding these limits would face penalties starting at $20 per metric ton of CO2e, with annual increases based on inflation plus an additional $10 per ton.

The proposal comes as major mining firms like Galaxy, CoreScientific, and Terawulf increasingly pivot toward AI infrastructure, leveraging their high-performance computing (HPC) setups to offset declining crypto revenues. However, critics argue the bill unfairly singles out crypto mining, with VanEck's head of research, Matthew Sigel, labeling it a 'Losing 'Blame the Server Racks' Strategy.'

The Clean Cloud Act has not yet passed and may face opposition from former President Donald Trump's deregulatory stance. The proposal aims to curb the rising power demand from data-heavy industries and prevent surging energy costs for American households, with data centers potentially consuming up to 12% of total U.S. electricity by 2028.