The Swedish authorities have announced the cancellation of tax incentives for data centers from July, which potentially hammers the last nail into the coffin of the crypto mining industry in the region. Recall that until recently, Sweden was the most popular country in Europe among Bitcoin miners.
The cost of energy in Europe has risen sharply over the past year, mainly partly due to the situation in Ukraine. The northernmost regions of Norway and Sweden were among the last where the mining industry remained profitable and functioned due to ideal conditions for data centers, as well as the presence of a cool climate and cheap electricity with a hydroelectric power plant.
However, even these remote Scandinavian countries were not left untouched by the energy crisis, which led to an increase in prices and the termination of the activities of cryptocurrency miners.
Energy prices have started to normalize this year. However, information about the tax increase is likely to stop new mining investments in the country. At the moment, about 150 megawatts (MW) are used by mining farms in Sweden. From July, the tax will increase from 0.006 Swedish crowns or $0.0006 to 0.36 Swedish crowns or $0.035 per kilowatt hour (kWh).
Based on average electricity prices last year, the tax increase may lead to the fact that the total cost of energy will be $0.093 per kWh and will call into question the profitability of not only crypto mining, but also other industrial sectors.