In an environmental assessment mandated by the Emerging Markets in Crypto Assets (MiCA) regulations, the Crypto Carbon Ratings Institute (CCRI) conducted released Detailed sustainability indicators for the Cardano blockchain. CCRI has partnered with the Cardano Foundation to work on a sustainability assessment that provides a detailed look at the network’s energy use, carbon emissions, waste generation, and broader environmental impact, and serves as a compliance check against the latest European Securities and Markets Authority (ESMA) regulatory standards.
Cardano is ready for MiCA
Cardano’s infrastructure, which runs on a proof-of-stake (PoS) protocol called Ouroboros, shows significant reductions in energy consumption when compared to traditional proof-of-work (PoW) networks. The Cardano network’s annual energy consumption is 704.91 megawatt-hours. From another perspective, traditional PoW networks like Bitcoin consume much more energy, often equivalent to the production of small countries, the report notes.
Cardano’s total annual carbon emissions were calculated at 250.73 tons of CO2e. The carbon intensity, which measures emissions per unit of electricity consumed, was recorded at 356 grams of CO2e per kilowatt-hour. This figure refers to the types of energy sources the network uses, reflecting a mixed reliance on both renewable and non-renewable resources.
“We found that the total annual carbon footprint of the Cardano network is 250.73 tons of CO2e. The carbon intensity of electricity consumed is 356 grams of CO2e per kilowatt-hour, indicating a marginal but necessary focus on more renewable sources to further reduce this metric,” the CCRI report states.
One of the new metrics introduced by the MiCA framework is waste generation, with a particular focus on e-waste. The Cardano network produces approximately 8.26 tons of waste electrical and electronic (WEEE) annually. Of this, 51.93% is not recycled, highlighting room for improvement in waste management practices within the lifecycle of network devices.
The report examines the impact of grid operations on natural resources, including the essential raw materials needed to produce hardware components. These materials are often scarce and require significant extraction costs, both environmentally and economically. Grid energy consumption also indirectly impacts water use, especially in regions where non-renewable energy sources are prevalent and water is used extensively for cooling purposes in power generation.
Under the MiCA regulations, which came into effect in June 2023, all crypto asset service providers are required to disclose the overall environmental impacts of their operations. CCRI’s detailed report on Cardano not only complies with these requirements, but sets a precedent for transparency in reporting sustainability metrics within the crypto industry.
At the time of writing, the Cardano network is running 3,147 nodes and has processed an annualized number of 19,530,055 transactions. These operational numbers are crucial to understanding the physical infrastructure of the network and its environmental load. The average power per node is 25.576 watts, and the total network power is 80.47 kilowatts. The power demand per transaction per second (TPS) is 0.192 watts.
Overall, the CCRI report provides a key insight into Cardano’s environmental profile and its alignment with global sustainability goals. As the crypto industry faces increasing scrutiny over its environmental impact, such assessments will be crucial for investors, regulators, and the broader community to make informed decisions about the sustainability of blockchain technologies.
At the time of publishing this report, ADA was trading at $0.41.
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