ALBANY, N.Y. — Gov. Kathy Hochul’s administration on Thursday denied a key permit for a gas powered cryptocurrency mining operation in the Finger Lakes, saying the facility spews too much planet-warming pollution to be allowed under the state’s climate law.
The decision by the state Department of Environmental Conservation on the Greenidge gas plant is the latest step in New York to curb the pollution from cryptocurrency mining facilities that have started to proliferate across upstate New York for the growing industry.
“We are applying a new law to a new operation which had significant increases in emissions — almost tripling emissions,” DEC Commissioner Basil Seggos told POLITICO in an interview Thursday. “The company itself was unable to demonstrate that it could come into compliance with the law.”
Hochul faced political pressure to deny the permit, but delayed it until after Tuesday’s gubernatorial primary that she convincingly won. She is also being pushed to sign a measure to put a moratorium on any other new fossil powered cryptocurrency mining projects in New York.
The 106 MW Greenidge gas plant hosts a large-scale Bitcoin mining facility, with about 17,000 miners. The plant has faced aggressive opposition from many local residents, lawmakers and winemakers in the region.
Greenidge Generation Holdings Inc., the company running the plant that employs about 50 people, said they plan to appeal the decision and that it will keep operating as usual while the process plays out in a statement Thursday.
“We believe there is no credible legal basis whatsoever for a denial of this application because there is no actual threat to the State’s Climate Leadership and Community Protection Act (CLCPA) from our renewed permit,” the company said in a statement.
“This is a standard air permit renewal governing emissions levels for a facility operating in full compliance with its existing permit today. It is not, and cannot be transformed into, a politically charged ‘cryptocurrency permit’.”
Environmental advocates and other opponents of the project argue the increased emissions from the cryptocurrency mining threaten achievement of New York’s sweeping Climate Leadership and Community Protection Act. The measure requires emissions to be slashed 40 percent from 1990 levels by 2030 and 85 percent by 2050.
DEC agreed in a letter explaining the decision to deny a renewal of the plant’s Title V emissions permit. The agency also said the company failed to provide any justification for a reliability or other need for the project given that it would interfere with the state’s climate goals, and that the purpose of the plant had changed significantly since the original permit was issued in 2016 for the plant.
“Any increase in emissions at this point makes it challenging for us to hit our targets which are very ambitious,” Seggos said. “As a slice of total emissions, this is but one operation but we are looking economywide … and we need to begin putting in place these strategies to reduce emissions as quickly as possible.”
Advocates who had pushed for the denial of the renewed permit praised the decision.
“Governor Hochul and the DEC stood with science and the people, and sent a message to outside speculators: New York’s former fossil fuel-burning plants are not yours to re-open as gas-guzzling Bitcoin mining cancers on our communities,” said Yvonne Taylor, vice president of Seneca Lake Guardian in a statement.
Greenidge has 30 days to pursue an administrative appeal of the permit denial. If it does not appeal, operations at the plant, which employs about 50 people, would have to cease.
The decision has significant implications for the state’s efforts to enforce the climate law, and may also alarm manufacturers, hospitals, universities, power companies and other businesses looking to renew their Title V permits. Seggos said the decision was narrowly tailored to the new cryptocurrency mining taking place at the plant.
DEC previously rejected two air permits to repower fossil fuel plants, building new gas turbines. The Greenidge plant was not seeking to build any new power generation, but instead sought to keep running the existing turbine at higher levels than in previous years while keeping emissions within previously permitted limits.
DEC’s decision letter notes that the actual emissions have increased since 2016, when the original permit was issued, and 2020, when the climate law was passed. That increase is because “Greenidge substantially altered the primary purpose” of the plant. A renewal would enable the company to continue to increase greenhouse gas emissions “for the benefit of its own behind-the-meter operations,” the letter states.
The DEC rejected arguments from Greenidge that the plant is only a fraction of the state’s total emissions and that a permit expiring before 2030 can’t interfere with the state’s 2030 emissions goals.
“Achieving the Statewide GHG emission limits will require substantial action prior to 2030, including to transition the energy sector away from its reliance on fossil fuels,” the letter states. “Even during the permit term, the Facility’s continued operation for the purpose of providing energy behind-the-meter to its cryptocurrency mining operations would make achievement of the Statewide GHG emission limits more difficult.”
The crypto mining now uses about 45 megawatts of the capacity of the 106 MW gas plant. When it runs, the plant is consistently selling power to the grid as well.
Greenidge was built in the late 1930s as a coal plant. It went out of service in 2011 and the new owners received state subsidies to convert to gas in 2017 when natural gas power was viewed as a “bridge” rather than a dead end for the planet. They then turned to Bitcoin to increase profits in 2020. The plant is owned by publicly traded Greenidge Generation Holdings, which also has digital currency mining operations in South Carolina.
The DEC had delayed the decision on a renewed permit again in March, citing a high volume of comments and an offer from Greenidge. Greenidge offered to cut its emissions 40 percent from current permitted levels by 2025 and be a zero emissions facility by 2035. That’s ahead of deadlines in the state’s climate law.
But those proposals are not sufficient, and the company failed to justify a need for the project, the department found.
Greenidge said the department did not engage on that proposal.
“They chose to pass up the opportunity to materially improve the environment, choosing instead to burden New York taxpayers with the expense of funding a lengthy administrative and judicial battle that could have easily been avoided,” the company said in the statement.
Greenidge has increased the amount of pollution it spews into the air and the water it sucks in from the lake and dumps at a higher temperature into a trout stream since it began mining cryptocurrency in 2020.
Greenidge expected its actual, on-site carbon dioxide emissions in 2022 and beyond to be 520,386 metric tons annually, according to filings. Emissions in 2019 were 65,607 metric tons and lower than 200,000 in the two prior years.
Environmental groups have also raised concerns about the water quality and aquatic life impacts. Like many combustion plants located on shorelines, Greenidge sucks up water for cooling and dumps it back at an elevated temperature.