The recent Senate Select Committee Report into Australia as a Technology and Financial Centre's Final Report considered the tax arrangements for businesses that undertake ‘mining’ of digital assets and related activities within Australia.
The recommendation arose from submissions regarding the energy consumption associated with some digital asset protocols – in particular, as the report highlighted, the energy intensity of Bitcoin mining.
Commentators and submitters raised concerns that the energy intensiveness required for mining and related activities could potentially undermine and compromise Australia’s net zero commitments. Accordingly, the Committee made the following recommendation:
The committee recommends that the Australian Government amend relevant legislation so that businesses undertaking digital asset 'mining' and related activities in Australia receive a company tax discount of 10 per cent if they source their own renewable energy for these activities.
Despite the recommendation not specifying how a business may qualify for this tax cut, digital asset mining businesses have already shown that they can become energy efficient. SolarCoin offers a novel approach to cryptocurrency, creating 1 SolarCoin for every Megawatt hour that is generated from solar technology.
Businesses such as Powerledger have also proven themselves to lead the campaign to make mining and related activities more eco-friendly, offering a peer-to-peer energy trading platform. Powerledger offers a decentralised and distributed network that helps energy producers track and trade energy in real-time, increasing the resilience and reliability of energy grids.
Sadly, this recommendation was not taken up by the Treasurer and so is unlikely to ever made it to law, so miners will need to keep making their own way in Australia and finding ways to use renewable energy without a little help from Uncle Skippy.