Is China’s Bitcoin crackdown cutting mining’s emissions—or shifting them somewhere else?

In 2020, China mined around two-thirds of the world’s Bitcoin, using about 86 terawatt-hours (TWh) of electricity, 63% of which came from coal-fired plants, according to Rystad Energy. The energy research firm estimates that if China were to eliminate Bitcoin mining, it would cut CO2 emissions by 57 million tonnes—the equivalent to what the entire country of Portugal emits in a year.

Although it is still the leading country for Bitcoin mining as determined by hash rate—the computing power dedicated to mining—China’s hash rate fell from more than 75% to 46% of the global total from September 2019 to April 2021, according to data from the Cambridge Centre for Alternative Finance.

The steep decline comes as China was beginning to intensify its crackdown on Bitcoin mining, whose electricity often came from illicit coal extraction, which has not only endangered lives but also undermined Xi Jinping’s ambitious environmental goals.

During the crackdown, 26 major Bitcoin mining hubs were forced to shutter in Sichuan, and during one week in June more than 70% of the total mining capacity in China went offline, industry analysts estimate. Bitcoin mining accounted for about 1.1% of China’s total electricity demand last year, according to Rystad.

Globally, Bitcoin mining consumes around 121 TWh a year, according to Cambridge University researchers, which is enough electricity to power the Netherlands. However, usage massively fluctuates as the price of Bitcoin swings up and down.

Ripple effects

China’s crackdown has led to an exodus of miners looking for new locales to reestablish their operations. Unfortunately, the alternatives may not be as clean as China, where 17% of electricity comes from hydropower, according to Rystad.

An option some take is the Central Asian republic of Kazakhstan, which has jumped to third place in its share of global hash rate, behind China and the U.S. Kazakhstan, which generates 87% of its electricity from fossil fuels, saw its mining hash rate share increase sixfold from September 2019 (1.4%) to April 2021 (8.2%).

Still, Alex de Vries, who oversees Digiconomist, a site that tracks Bitcoin’s electricity usage, tells Fortune that today the amount of hydropower used to mine Bitcoin in China is enough to offset the effect of the use of coal in China as well as other parts of the world.

The Chinese southwestern province of Sichuan has an abundance of hydroelectric power, which is fed by Asia’s largest river, Yangtze—making it home to one of the biggest mining operations in the world.

But by banishing mining, China eliminates one of the few major green Bitcoin production locations on the planet, most likely shifting a higher proportion to coal, and perhaps worsening the currency’s overall impact on global warming.

Bitcoin has had an environmental PR problem of late, with Elon Musk withdrawing his support for the currency over its electricity consumption—a decision that knocked billions off the cryptomarkets.