Ever since its first development, blockchain has attracted considerable attention from actors and institutions in various sectors, including the energy transition. In 2018, the UN highlighted the potential of blockchain and tokenisation in the development of renewable energy through the creation of a dedicated taskforce. The European Environment Agency published various papers on that topic, including on the environmental impacts of blockchain, as the EU is on the verge of adopting a dedicated legal framework on crypto-assets, the Markets in Crypto-Assets (MiCA) Regulation.

Tokenisation plays a key role in the development of blockchain, potentially revolutionising the area by enabling a recording and ‘representation’ of an asset (whether physical or not) through a token (under the so-called ‘tokenisation’ process) and transfer and exchange either on a bilateral (‘OTC’) basis or through an exchange or platform.

Blockchain for the energy transition

While tokens were initially introduced in the energy sector as incentives—in order, for instance, to promote the construction of renewable energy infrastructure—more and more projects are seeking to leverage the opportunities offered by the blockchain infrastructure, opening up new opportunities for those in the energy sector, whether traditional actors or new players:

  • The most common example of tokenisation in relation to energy is the tokenisation of carbon credits. Such tokens allow their holders to offset their environmental footprint, with an objective to reduce greenhouse gas emissions. These tokens are akin to regular carbon credits, with the difference that they are registered in a blockchain. As blockchain was initially considered as a register for carbon credit tokens, more and more sophisticated projects emerged, offering trading solutions for carbon credit tokens, benefitting from blockchain’s decentralised infrastructure. By way of illustration, some carbon credits can be tokenised on the basis of the emissions savings generated from using renewable energy sources in the production of electricity instead of fuel or other fossil resources.

  • Renewable energy can also be tokenised to be exchanged on platforms against other tokens or fiat currencies. Various examples illustrate the tokenisation of green electricity or solar energy. The tokens are then traded between producers and consumers. In some projects, tokens can be awarded for the production of renewable energy and then even be accepted as a method of payment by other actors. As illustrated by a vast array of applications, blockchain and its decentralised infrastructure can enhance the connection between producers and consumers. This approach is in line with blockchain philosophy.

  • In a context of growing greenwashing practices, the certification of the renewable origin of energy through blockchain is another illustration that could prove to be a useful tool in the energy transition, as blockchain is often praised for being trustworthy. Various projects are therefore dedicated to the certification of the origin of electricity produced through renewable resources. Blockchain precisely allows for such functionality, enabling a full record of all transactions and block certification. When a certain amount of electricity is produced, a token is issued to guarantee its origin. Such tokens could then be exchanged and transferred on platforms or kept by custodians, the provision of services from which is subject to a specific status, such as digital asset services providers in France, pending the European status under the MiCA Regulation.

  • Non-fungible tokens, the non-fungible nature of which can be a powerful tool, could also have a role to play in the energy transition, notably through the certification of energy or the development of carbon credit tokens, although requiring a ‘unicity’ or ‘non-fungible’ test to be met (g., a specific solar farm).

  • Lastly, tokens can appear as an innovative source of funding in the energy transition. Through initial coin offerings (ICOs), actors promoting renewable projects can access additional sources of funding: they grant each investor a token in exchange for their funding, this token allowing the holder to access services or acquire goods. In France (and pending the aforementioned European rules in that area in the MiCA package), the supervision authorities created a dedicated visa for ICOs, intended to be a label of compliance with French rules, through the French financial markets authority.

French dedicated framework

Tokenisation additionally benefits from a supportive regulatory environment in France. Pursuant to French law and depending on their nature and properties, tokens could be classified either as tokens (jetons) or as other digital assets (actifs numeriques). A case-by-case analysis is required as other qualifications could arise, entailing specific registration or licensing regimes (electronic money, miscellaneous assets regime, etc.).

More and more projects are seeking to leverage the opportunities offered by the blockchain infrastructure

France’s Pacte Law established a dedicated framework for DASPs carrying out services on digital assets such as the operation of a trading platform and custody on behalf of third parties, as well as token issuers. To offer their services to French customers involving ICOs, or services on tokens such as carbon credit tokens or renewable energy-backed tokens, the relevant status should be applied, and entails various requirements (e.g., licensing, approval of a white paper, marketing restrictions, cash segregation, etc.).


The growing development of blockchain applications and token-based projects over the last decade has raised growing concern as to their ecological impact, concern that is reinforced when the blockchain is used for the promotion of renewable energy, for instance.

The main criticism is the amount of energy the blockchain requires through mining. This depends on the consensus algorithm the blockchain relies on, this algorithm being essential for record-keeping, for instance. The proof-of-work protocol is used by the majority of blockchain projects and is often criticised as being energy-consuming, as it could involve tremendous amounts of power to run computer calculations.

As a result, more and more projects rely on the proof-of-stake consensus algorithm rather than the proof-of-work. On the other hand, mining activity may be used as a way to balance the energy supply and demand. Further alternative protocols known as being less energy-intensive, could be considered, as well as the use of renewable energy, including solar.

The upcoming adoption of the EU MiCA Regulation will be critical for the future of the energy transition as it will provide a uniform and coherent framework for tokenisation throughout the EU and might open up new possibilities for energy transition. The future, though, depends on the ability of relevant states to enter into international treaties recognising the enforceability of rights in the blockchain, as well as a clear legal regime applicable to the tokenisation process and rights entailed by the issue of energy tokens.

Sebastien Praicheux is a partner, and Clemence Durand and Celestine Barthout associates, at Norton Rose Fulbright.



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