(Bloomberg) — Bitcoin’s environmental dark side has been glossed over for years. Elon Musk changed that with a tweet.And with it, the Tesla Inc. chief executive officer threw open what some see as a new market opportunity for crypto “miners” brandishing their eco-friendly credentials. Some are working to sell what they are calling green Bitcoin — coins whose transactions are verified on the blockchain by computers powered only by renewable energy. The bet is that they will be able to command a premium of up to 10%.“There’s a market that doesn’t know it yet,” said Sheldon Bennett, CEO at crypto miner DMG Blockchain Solutions Inc. His firm has had discussions with “multiple banks and financial institutions” that want to buy Bitcoins that can fulfill increasing demand for environmental, social and corporate governance compliance, he said. “More and more, they are saying if there’s an option, I am willing to pay a premium to get it.”The corporate world has increasingly focused on environmental concerns in recent years — or at least on appearing to care about green issues. With the shift, investors are hot to buy into renewable energy as the next big thing. Companies in every sector are pledging to cut their carbon emissions. And the Biden administration has set tough carbon goals and promised to fund new green technologies. Even before Musk helped to roil the crypto world with his tweet saying Tesla would no longer accept Bitcoin as payment, industry participants have been moving to address the green backlash. In addition to the mining pool focused on specifically using renewable energy, DMG recently joined the Crypto Climate Accord, a private-sector initiative to decarbonize the crypto industry by 2030. The group was inspired by the Paris Climate Agreement.The idea of paying a premium for green Bitcoin may not be such a stretch, considering that coins that don’t use energy-intensive mining — such as Cardano and Polkadot — actually enjoyed a short rally following Musk’s comments when Bitcoin tumbled. The protocols they use to secure their networks and process transactions use less power than the system that supports Bitcoin.A growing number of companies in the crypto industry are alert to the danger of being tagged as not green, said Isaac Maze-Rothstein, a research analyst at Wood Mackenzie.Intense Competition“There are a bunch of miners who saw what happened with the coal industry,” he said. “So they only pursue a project if it’s carbon negative. There are others who want to co-locate with wind, or with solar.”Miners’ willingness to shoulder potentially higher costs to go green may depend on Bitcoin’s price, of course. When the going gets tough, many green miners may be forced to change their game and go for lower cost, and dirtier energy, instead, said Christopher Bendiksen, head of research at CoinShares, a provider of digital-asset investment services.“Right now mining is hyper profitable,” Bendiksen said. “And these hyper profitability periods don’t last forever. When mining costs start approaching Bitcoin price again, the costs will matter. Bitcoin mining is absolutely ruthless, and you are competing against miners that are in different countries than you are, and they don’t necessarily care about the environment like you do. It’s quite dangerous for your competitiveness over time.”Today, only between 55% to 65% of total Bitcoin mining is done using renewable energy, Bendiksen estimated. About 50% of all Bitcoin is being mined in China, some of whose regions rely on cheap coal. Some of it is mined in Kazakhstan and Iran, using dirty energy as well.Ironically, some Bitcoin miners that call themselves green have managed to get to a low energy cost that can help them survive downturns — by purchasing old coal-burning power plants. While designating themselves as green miners may raise some eyebrows, the strategy appears to be increasing in use.Greenidge Generation Holdings, is mining using a dormant New York state-based coal-powered power plant, which has been converted to natural gas. Starting in June, the company will be purchasing carbon offset credits to be carbon neutral.Elsewhere, Stronghold Digital Mining Inc. owns a plant in Scrubgrass Township, Pennsylvania, that runs on waste coal. The state has about 700 piles — some of them containing as many as 10 million tons — of coal-containing waste left over from steel making. Stronghold gets paid by the state to clean up the piles, which it burns to generate energy — some for Bitcoin mining.“We don’t know of anyone who has a lower cost of power than us,” said Greg Beard, Stronghold’s CEO.Others are going for more innovative methods. A firm called Gather mines crypto using the unused processing power of computers used by people visiting Websites the company partners with. While users are streaming a video or reading the news on a website that’s teamed up with Gather, the company will mine crypto.“You’re not building massive new server farms in Iceland or Alaska, you’re just using the wasted resources that are already consuming electricity,” said Gather CEO Raghav “Reggie” Jerath, who founded the company in 2018. “We are not taking extra electricity from the grid.”Talen Energy Corp., a debt-laden power producer operating in the U.S. Northeast and Texas, unveiled a sweeping plan this week to focus more on clean energy and expand into crypto mining. The Woodlands, Texas-based company owns a mix of natural gas, coal, nuclear and solar plants.For Gryphon Digital Mining, one of the cheapest and longest used sources of power fits the bill while keeping it all simple. Gryphon, which expects to begin mining in August, plans to go 100% hydropower using a facility in upstate New York.“We are ESG committed,” said Gryphon CEO Rob Chang. “We will only look at renewable. We’ll not do the financial gymnastics others do.”(Updates chart.)More stories like this are available on bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.