Norwegian cryptocurrency mining companies are eying Sweden due to Norway?s decision to end its discounted tax rate for crypto miners.
Cryptocurrency mining firms in Norway have been enjoying discounts offered to companies that consume a lot of electricity. Firms that consume more than 500 kilowatts pay a discounted price of 0.48 Norwegian Krone (5.6 cents) for each kilowatt-hour. However, the discount is being slashed and crypto mining companies operating in Norway are contemplating Sweden as the next best place to run their operations.
Because of Norway’s recent budget change, which will discontinue the discounted electricity tax rate for #cryptocurrency mining companies, multiple Norwegian mining outfits are faced with challenges, but Sweden may offer a solution. https://t.co/O51Qt2TfOo
? etherfox (@etherfox) November 27, 2018
A drastic rise in operational costs for crypto mining firms in Norway
Now that Norway?s discounted electricity rate is being abolished, cryptocurrency mining companies will have to pay the normal rate. The problem with that is that the rate is significantly high at 16.58 Krone which is equivalent to almost $2 per kilowatt hour.
Norway is expected to implement the changes in January next year. However, the electricity tax changes are expected to discourage cryptocurrency miners from operating in the country. Most of the crypto mining firms chose Norway due to its cool climate and affordable hydroelectric power.
?Norway cannot continue to provide huge tax incentives for the dirtiest form of cryptographic output like bitcoin. It requires a lot of energy and generates large greenhouse gas emissions globally,? stated Lars Haltbrekken, a Norwegian parliamentary representative as he explained the reason for the changes.
Sweden currently looks quite attractive to the crypto miners exiting Norway
Fortunately, it is not all bad news for mining companies because the neighboring country, Sweden offers attractive electricity tariffs. Erik Svensson, the CEO of Boden Business Agency, a data center firm based in Sweden revealed that most cryptocurrency businesses plan to set up shop in Sweden. Bitmain is one of the popular cryptocurrency-based firms that plan to move. The company plans to relocate its current Norwegian office either to Sweden or Denmark.
Bitmain?s international sales manager Julie Hvideberg says the company?s Norwegian partner will lose a major contract due to the move. She also revealed that Norway?s electricity tax changes make it difficult for the company to maintain its operations in the country.