A recent study published in MDPI's Risks journal suggests that higher European Union carbon prices may be pushing Bitcoin mining activity toward Russia. Researchers analyzed daily data from January 2019 to January 2026, comparing EU carbon allowance returns, Bitcoin returns, and power sector emissions across the EU27, Russia, and the rest of the world. They found a statistically significant positive relationship between Bitcoin returns, EU carbon allowance returns, and Russian power sector emissions, particularly after 2020, when China cracked down on mining and EU carbon prices surged. The study does not prove that mining machines physically moved from Europe to Russia. Instead, it suggests miners with equipment in both regions may switch operations based on where electricity costs are lower. Since Russia lacks an EU-style carbon pricing system, higher carbon costs in Europe can make Russian mining more attractive when Bitcoin prices are high. This highlights a potential carbon leakage risk, where emissions reductions in one region are offset by increases elsewhere. For carbon market policymakers, this finding underscores the importance of considering cross-border effects when designing emissions trading systems. If carbon pricing inadvertently shifts energy-intensive activities to regions with weaker climate policies, the net environmental benefit may be smaller than intended. The study adds to the growing evidence that carbon pricing needs complementary measures, such as border carbon adjustments, to prevent leakage.
