Inner Mongolia, an autonomous region in northern China, is planning to shut down all cryptocurrency mining activities in the area by April 2021, as part of efforts to improve energy efficiency.

Regulating the Electrical Consumption in Inner Mongolia

The government of Inner Mongolia will also stop approving new projects in energy-intensive industries such as steel and coke production, Reuters reported on Mar. 1, citing a draft policy to regulate energy consumption in the region.

Chinese journalist “Wu Blockchain” tweeted that the decision might be due to China’s need to meet its carbon emissions commitments under the U.N. climate change treaty. Much of the energy produced in Inner Mongolia is coal-based, a major source of climate-changing greenhouse gas emissions. China, the world’s second-largest polluter after the U.S., aims to achieve carbon-neutrality by 2060.

Together with the likes of Sichuan and Xinjiang provinces, Inner Mongolia is a favorite destination for miners looking to extract bitcoin (BTC) at low electricity prices. According to Cambridge University’s Bitcoin Electricity Consumption Index, Inner Mongolia accounts for eight percent of the global hash power total, and China 65%, though these figures have been brought into question.

Beijing’s Energy Consumption Targets Carbon Neutrality Before 2060

However, the region drew criticism from the central government in September after it failed to meet Beijing’s energy consumption and energy intensity targets in 2019. It was the only one of 30 Chinese mainland areas that failed to do so, according to the Reuters report.

Now, China’s second-largest coal-mining region is going all out to cut consumption from sectors considered to be using a lot of electricity, including bitcoin mining. Crypto mining, which requires large amounts of computing power, will be shut down by April this year. Other affected industries have until the end of 2022 to wind down their operations.

Per the Reuters report, Inner Mongolia “aims to cap energy consumption growth at around five million tonnes of standard coal equivalent in 202.” It also plans to cut “the amount of energy consumed per unit of economic growth, by three percent from 2020

“[(Inner Mongolia] will tighten its energy control measures and bear the targets throughout all economic and social aspects,” said the draft policy. The region’s energy intensity rose by 9.5% during the period 2016-2019.