There is evidence that crypto-assets can cause significant harm on the climate and environment and generate negative economic and social externalities, depending on the consensus mechanism used to validate transactions. The increasing demand for crypto-assets and expansion of crypto-mining, including within the EU, could undermine EU's efforts to achieve its climate and sustainability goals, in line with the Paris Agreement. The action aims at enhancing the EU capacity to assess and mitigate the impact of crypto-mining and develop specific sustainability standards.

The preparatory action intends to develop a methodology to measure the climate and environmental impact of the consensus mechanisms used by crypto-assets and assess the feasibility of establishing environmental sustainability standards for crypto-assets with a view to the adoption of future legislative action in the area of crypto-asset financial regulation.

Developing a methodology and sustainability standards for mitigating the environmental impact of crypto-assets.