US Senate draft bill targets AI and crypto data centers with emissions fees

A draft bill in the US Senate proposes imposing fees on data centers supporting blockchain networks and AI models that surpass federal emissions targets.

The bill, spearheaded by Senate Democrats Sheldon Whitehouse and John Fetterman, is designed to tackle the environmental effects of increasing energy demand while shielding households from higher energy costs, according to Bloomberg.

Key provisions of the Clean Cloud Act and industry reactions

Named the Clean Cloud Act, the proposed legislation requires the Environmental Protection Agency (EPA) to establish an emissions performance standard for data centers and crypto mining facilities with more than 100 KW of installed IT nameplate power.

The standard would be determined by regional grid emissions intensities, aiming for an 11% annual reduction in emissions. The bill also introduces penalties for surpassing the established limits, starting at $20 per ton of CO2e, with the fine increasing annually by inflation plus an additional $10.

“Surging power demand from crypto miners and data centers is outpacing the growth of carbon-free electricity,” notes a minority blog post on the US Senate Committee on Environment and Public Works website. According to the post data centers, electricity usage will account for up to 12% of the US total power demand by 2028.

The rapid growth of data centers is projected to generate approximately 2.5 billion metric tons of CO2 emissions globally by the end of the decade, according to research from Morgan Stanley.

Matthew Sigel, VanEck’s head of research, argues that the proposed legislation targets Bitcoin miners and similar operations for their energy consumption in a “Losing ‘Blame the Server Racks’ Strategy,” as he stated in an April 11 post on X.

Moreover, the law may conflict with US policy under President Donald Trump, who reversed a 2023 executive order from former President Joe Biden that set AI safety standards. Trump has also expressed his goal of making the US the “world capital” of both AI and cryptocurrency.

Bitcoin miners pivot to AI rel=”nofollow” target=”_blank”>said. Still, it has yet to be passed in the Senate.

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