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Elon Musk wants a greener bitcoin. Has he got a plan or a pipedream?

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Elon Musk says Tesla won’t use or accept bitcoin until he can be sure it’s produced sustainably. He may be waiting some time.

Musk announced his new position in a major U-turn on Wednesday, prompting speculation among some experts about whether he had a plan to wean the crypto industry off the fossil fuels that power “mining,” the energy-intensive process that creates coins.

Tesla could itself take an active role in helping make bitcoin greener by investing in new projects aimed at boosting the use of renewable energy in mining, according to more than a dozen cryptocurrency specialists interviewed by Reuters.

“Musk and Tesla certainly have the resources to support existing efforts to fully move bitcoin to renewable energy,” said Diana Biggs, CEO of crypto startup Valour.

But such ventures could take years to get off the ground.

Another potential route is for Tesla to shift from bitcoin to more eco-friendly digital currencies that don’t rely on mega-computers spawning new tokens, according to the experts.

Yet this too presents major headaches, they say, not least gaining broad crypto industry agreement for software changes and resolving regulatory concerns over smaller coins.

Musk tweeted that while Tesla would no longer accept payment in bitcoin – two months after announcing that it would – the company wouldn’t sell its bitcoin holdings, instead intending to use them when mining became greener energy.

Tesla is also looking at other cryptocurrencies that use less than 1% of the energy burned by bitcoin, he added.

The industry experts interviewed by Reuters said they thought it was unlikely that Musk had been blissfully unaware until now of the environmental concerns surrounding bitcoin production.

The move may represent an attempt to bolster Tesla’s environmental credentials amid growing competition in the electric vehicle sector, said Sasja Beslik, head of sustainable business development at Bank J. Safra Sarasin in Zurich.

“My indication of this is that it is a way to further strengthen the brand,” he said. “It’s up to them to hold any currency they want. But given the fact that it has a heavy CO2 footprint … it is a challenging thing.”

Tesla did not immediately respond to a request for comment.

GREENER OPTIONS?

After his original tweet, Musk followed the next day with a chart showing bitcoin’s power consumption. “Energy usage trend over past few months is insane,” he wrote.

Yet environmentalists have criticised bitcoin’s energy consumption and its reliance on fossil fuels for years, not months.

“As it stands, the use of bitcoin doesn’t align with Tesla’s own mission statement,” said Alex De Vries, founder of research platform Digiconomist.

“That’s not something that suddenly happened during the past two months in which Tesla first decided to accept bitcoin. The network was already running on fossil fuels like Chinese coal – nothing has really changed in such a short timeframe.”

Bitcoin mining uses about the same amount of energy annually as Egypt did in 2019, data from the University of Cambridge shows.

Much of it is powered by coal, the dirtiest of all fossil fuels. Chinese miners accounted for about 70% of production, data from the university shows . Many use fossil fuels, switching to renewables like hydropower during the rainy summer months.

 

(Graphic – Bitcoin: Power hungry – )

 

WATERMARKED BITCOIN?

Tesla could invest in greener mining options, said Yves Bennaim, the founder of Swiss crypto think-tank 2B4CH. It could create by itself groups of bitcoin miners that use green energy, or connect customers to mining pools, he added.

Projects globally are looking for ways to shift bitcoin mining towards cleaner energy, or at least to reduce its carbon footprint, from repurposing heat generated by mining using flare gas – a by-product from oil extraction – for crypto mining.

Payments company Square Inc, run by Twitter CEO Jack Dorsey, last year said it would give $10 million https://squareup.com/us/en/press/carbon to support firms boosting the use and efficiency of renewables in the bitcoin sector.

In theory, blockchain experts have said, it would be possible to track which bitcoins have been produced sustainably, also giving Tesla an option to only accept greener bitcoins.

“He can probably invest in some green energy miners and mandate that Tesla will only get paid by greenly mined bitcoin,” said Maya Zehavi, a cryptocurrency and blockchain consultant.

“There’s also been a lot of talk of watermarked bitcoin, splitting bitcoin mined by Western countries and those mined in China and North Korea.”

BITCOIN ALTERNATIVES

Tesla could also switch its focus on cryptocurrencies towards tokens that run on a less power-hungry system for producing new digital coins are created.

Through bitcoin’s protocol, or underlying code, computers hooked up to its network competed against each other to solve complex maths puzzle. The system, known in crypto lingo as “proof of work”, is highly energy intensive.

An alternative protocol lets users create new tokens by committing existing cryptocurrencies to digital contracts – potentially lessening reliance on energy-guzzling computers.

Ether, the second-biggest cryptocurrency, is moving to this system, known as “proof of stake”. Still, many existing coins that use this system are still relatively hard to use at scale, and are less widely known than bitcoin.

“The only real answer is 1. actively investing in renewable mining farms and making mining “greener” or 2. switching to a protocol that is based on proof of stake,” said Larry Cermak, director of research at crypto site The Block.

Cryptocurrencies that consume less energy, such as seventh-largest coin XRP, may present other concerns, experts said.

Investors have worried about XRP since U.S. regulators charged blockchain firm Ripple, a major backer of the cryptocurrency, with an $1.3 billion unregistered securities offering last year. Ripple has denied the charges.

Some have also suggested changing bitcoin’s protocol itself, to lower its power consumption. Yet getting all users in bitcoin’s decentralised network of miners, run by no oversight body, to agree would be challenging, experts warned.

“The whole bitcoin mining ecosystem has invested billions of dollars in hardware,” said Jack Liao, CEO of Chinese mining firm LightningAsic. “How can they change the protocol? Change means a loss of billions.”

 

(Reporting by Tom Wilson and Anna Irrera; Editing by Pravin Char)

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EU, U.S. agree to talk on carbon border tariff

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The United States and European Union agreed on Tuesday to hold talks on the bloc’s planned carbon border tariff, possibly at the World Trade Organisation, EU chief executive Ursula von der Leyen said.

U.S. President Joe Biden met European Commission President von der Leyen and European Council President Charles Michel on Tuesday for a summit tackling issues from trade to the COVID-19 pandemic.

The leaders also discussed climate change policy, including the EU’s plan to impose carbon emissions costs on imports of goods, including steel and cement, which the Commission will propose next month.

“I explained the logic of our carbon border adjustment mechanism,” von der Leyen told a news conference after the summit.

“We discussed that we will exchange on it. And that WTO might facilitate this,” she said.

Brussels and Washington are keen to revitalise transatlantic cooperation on climate change, after four fractious years under former president Donald Trump.

On Tuesday, they outlined plans for a transatlantic alliance to develop green technologies and said they will coordinate diplomatic efforts to convince other big emitters to cut CO2 faster.

But the EU border levy could still cause friction. A draft of the proposal said it would apply to some U.S. goods sold into the EU, including steel, aluminium and fertilisers.

Brussels says the policy is needed to put EU firms on an equal footing with competitors in countries with weaker climate policies, and that countries with sufficiently ambitious emissions-cutting policies could be exempted from the fee.

The United States and EU are the world’s second- and third- biggest emitters of CO2, respectively, after China.

A draft of the EU-U.S. summit statement, seen by Reuters, repeated commitments the leaders made at the G7 summit at the weekend to “scale up efforts” to meet an overdue spending pledge of $100 billion a year by rich countries to help poorer countries cut carbon emissions and cope with global warming.

It did not include firm promises of cash. Canada and Germany both pledged billions in new climate finance on Sunday, and campaigners had called on Brussels and Washington to do the same.

The draft statement also stopped short of setting a date for the United States and EU to stop burning coal, the most polluting fossil fuel and the single biggest of greenhouse gas emissions.

Brussels and Washington said they will largely eliminate their CO2 emissions from electricity production by the 2030s.

 

(Reporting by Kate Abnett, additional reporting by Valerie Volcovici; Editing by Marguerita Choy, Andrew Heavens and Barbara Lewis)

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U.S. fine Air Canada $25.5 milliom over delayed refunds

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The U.S. Transportation Department said on Tuesday it was seeking a $25.5 million fine from Air Canada over the carrier’s failure to provide timely refunds requested by thousands of customers for flights to or from the United States.

The department said it filed a formal complaint with a U.S. administrative law judge over flights Air Canada canceled or significantly changed. The penalty is “intended to deter Air Canada and other carriers from committing similar violations in the future,” the department said, adding Air Canada continued its no-refund policy in violation of U.S. law for more than a year.

Air Canada said it believes the U.S. government’s position “has no merit.” It said it “will vigorously challenge the proceedings.”

Air Canada obtained a financial aid package this spring that gave the carrier access to up to C$5.9 billion ($4.84 billion) in funds through a loan program.

The carrier said it has been refunding nonrefundable tickets as part of the Canadian government’s financial package. Since April 13 eligible customers have been able to obtain refunds for previously issued nonrefundable tickets, it said.

The Transportation Department disclosed it is also “actively investigating the refund practices of other U.S. and foreign carriers flying to and from the United States” and said it will take “enforcement action” as appropriate.

The administration said the Air Canada penalty sought was over “extreme delays in providing the required refunds.”

Refund requests spiked during the COVID-19 pandemic.

Since March 2020, the Transportation Department has received over 6,000 complaints against Air Canada from consumers who said they were denied refunds for flights canceled or significantly changed. The department said the airline committed a minimum of 5,110 violations and passengers waited anywhere from five to 13 months to receive refunds.

Last month, a trade group told U.S. lawmakers that 11 U.S. airlines issued $12.84 billion in cash refunds to customers in 2020 as the coronavirus pandemic upended the travel industry.

In May, Democratic Senators Edward Markey and Richard Blumenthal called on carriers to issue cash refunds whether flights were canceled by the airline or traveler.

($1 = 1.2195 Canadian dollars)

(Reporting by David Shepardson in WashingtonAdditional reporting by Allison Lampert in MontrealEditing by Matthew Lewis)

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Egypt upholds death sentence for 12 senior Muslim Brotherhood figures

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Egypt’s highest civilian court on Monday upheld death sentences for 12 senior Muslim Brotherhood figures over a 2013 sit-in which ended with security forces killing hundreds of protesters, judicial sources said.

The ruling, which cannot be appealed, means the 12 men could face execution pending approval by President Abdel Fattah al-Sisi. They include Abdul Rahman Al-Bar, commonly described as the group’s mufti or top religious scholar, Mohamed El-Beltagi, a former member of parliament, and Osama Yassin, a former minister.

Many Muslim Brotherhood figures have been sentenced to death in other cases related to the unrest that followed the military’s ousting of Brotherhood president Mohamed Mursi in 2013, but the Court of Cassation ordered retrials.

Rights groups have documented a sharp rise in the number of executions in Egypt, with at least 51 carried out so far this year according to Amnesty International.

“Instead of continuing to escalate their use of the death penalty by upholding death sentences following convictions in grossly unfair mass trials Egyptian authorities must immediately establish an official moratorium on executions,” Amnesty said in a statement.

Monday’s ruling relates to a mass trial of hundreds of suspects accused of murder and incitement of violence during pro-Brotherhood protests at Rabaa al-Adawiya square in Cairo in the weeks after Mursi’s overthrow.

In September 2018, an Egyptian criminal court sentenced 75 people to death and issued varying jail terms for more than 600 others. Many defendants were tried in absentia.

Forty-four of those sentenced to death appealed to the Court of Cassation. Thirty-one had their sentences changed to life in prison, while death sentences were upheld for 12 others.

A final defendant, the senior Muslim Brotherhood leader Essam el-Erian, died in prison in Cairo in August 2020. Mursi, Egypt’s first democratically elected president, died in prison in 2019.

The court also upheld jail terms for many other defendants including a life sentence for Mohamed Badie, leader of the outlawed Brotherhood, and a 10-year jail term for Mursi’s son Osama, the judicial sources said.

 

(Reporting by Haitham Ahmed; writing by Mahmoud Mourad; editing by Aidan Lewis, William Maclean and Grant McCool)

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