Oct

Update Report

The Energy Efficiencyand Carbon Footprint of thePolygon Blockchain© Crypto Carbon Ratings Institute, 2022
Crypto Carbon Ratings Institute (CCRI) is a brand of CCRI GmbH based in Dingolfing, Germany.

https://carbon-ratings.com

The Energy Efficiency and Carbon Footprint of the Polygon Blockchain

Update Report – The Energy Efficiency andCarbon Footprint of the Polygon Blockchain
October 2022
CCRI
carbon-ratings.com

PreambleThis commissioned report is prepared by CCRI forPolygon Technology

Executive summary•CCRI published a report in September 2022 on the electricity consumption and carbon footprintof the Polygon network, covering emissions from both layer 2 and the underlying layer 1,Ethereum.

•The Merge, Ethereum’s switch from Proof of Work (PoW) to Proof of Stake (PoS), has significantly
reduced the network’s electricity consumption and carbon footprint. This also reduces thePolygon layer 1 emission allocation.

•This update report covers:
oPolygon’s remaining emissions “pre-Merge”, from 1st August 2022 till 15th September 2022
(till the Merge), that were not subject to the previous report andoPolygon’s updated layer 1 allocation emissions “post-Merge” as well as a comparison
to the initial indication provided in the previous report.

•From 1st August 2022 till 15th September 2022, it is estimated that the activity of Polygon on
Ethereum (pre-Merge) has caused 4.0 ktCO2e emissions. Since the inception of the network,Polygon has caused 98.7 ktCO2e on the Ethereum PoW chain.

•As the majority (more than 99.9 %) of emissions originated from the activities of Polygon on
Ethereum with PoW, the Merge also has reduced the overall carbon footprint of the Polygonnetwork by 99.91 %. Now, only 8.85 % of the total network emissions result from the layer 1allocation.

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The Energy Efficiency and Carbon Footprint of the Polygon BlockchainI.

Overview

In September 2022, CCRI published an extensive report on the electricity consumption and carbon footprintof the Polygon network, including both emissions from Polygon’s own PoS network as well as emissions thatare a result of activity on Polygon’s layer 1 network, Ethereum. As Ethereum has leveraged the PoW consensus
mechanism, the associated emissions of these activities by the Polygon network resulted in significantemissions, making up more than 99% of Polygon’s total emissions.
The long-awaited Merge, Ethereum’s switch from Proof of Work to Proof of Stake, has considerably reduced
the electricity consumption and carbon footprint of the Ethereum network: The electricity consumption has
been reduced by over 99.988 % and the carbon footprint by over 99.992 % (CCRI, 2022f). This reduction
corresponds to shrinking the Eiffel tower to the size of a plastic toy figure.
While the Merge has reduced the environmental impact of the Ethereum network, it also has a positive effecton any layer 2 application, side chain or rollup network that builds upon Ethereum. This also applies to Polygon.
While CCRI predicted the Merge’s effect on Polygon’s environmental sustainability metrics, this report updates
and refines this estimate.
Additionally, this report includes a calculation for the remainder of the emissions of Polygon’s activity on thePoW Ethereum network from 1st August 2022 till 15th September 2022. This enables to calculate the entire carbon
footprint of the Polygon network for the “Ethereum PoW” period.

Author’s note:This report is an update to the report “Energy Efficiency and Carbon Footprint of the Polygon Blockchain”,
published by CCRI in September 2022, commissioned by Polygon Technology. The report is available here.
For the sake of brevity, this report does not reiterate the approach, methodologies, and assumptions madein the previous report. If you are interested in understanding the underlying mechanisms of the calculations,
we recommend reading the initial report first and then continue reading this update.
Thanks,CCRI teamCCRI 20224The Energy Efficiency and Carbon Footprint of the Polygon Blockchain

II.

Remaining Emissions from PoW allocation

The previous report provided an extensive overview and reasoning for determining the carbon footprint
allocation from the base layer, Ethereum, to the Polygon network. This chapter gives a brief overview of theprocess and then provides the updated results.

1. Base layer allocation of Ethereum PoW
Polygon is a layer 2 Proof of Stake network built on the Ethereum network which utilized a Proof of Work
consensus mechanism until 15th September 2022 and then switched to a PoS algorithm. Polygon relies andutilizes Ethereum’s security properties for the integrity of its own network by periodically committing the stateof its own chain on Ethereum. To conduct a proper emission estimate of the Polygon PoS network, one also
needs to account for any activities that the Polygon network is responsible for on the underlying Ethereumlayer. For that, we deploy a five-step approach as outlined in our previous report to understand and calculate
the CO2e emissions stemming from the activities on the Ethereum base layer (CCRI, 2022d).
We leverage the methodology for deriving the electricity consumption of Ethereum by Gallersdörfer, Klaaßen,and Stoll (2020) and the carbon intensity of Proof of Work networks by de Vries, Gallersdörfer, Klaaßen, andStoll (2022)1. We use a hybrid allocation methodology to account for both transactions and holdings asoutlined in (CCRI, 2022a)2. We identify Polygon’s smart contract addresses using Etherscan (2022) andexport transaction and holding data using Trueblocks (2022).

2. Emission allocation results
The respective 39 contracts are involved both in transaction activity as well as in holding cryptocurrency.
Table 1 summarizes the results for both activities over the period between the last report and Ethereum’s
merge as well as the total network lifetime of Polygon on Ethereum with Proof of Work.

Period(1) Remaining period(01.08.2022 – 15.09.2022)(2) Total(20.04.2019 – 15.09.2022)

Emissions from transactions

Emissions from holdings

Total emissions

536.27 tCO2e

3,439.19 tCO2e

3,975.46 tCO2e42,140.53 tCO2e56,527.70 tCO2e

98,668.23 tCO2e

Table 1: Overview of the base layer allocation emissions for both holdings and transactions for(1) the remaining period and (2) the total network lifetime on Ethereum PoW.

We find that the Polygon network is responsible for 4.0 kt CO2e emissions due to its activity on the base layerof Ethereum for the remaining period since our initial report. In total, Polygon’s entire emissions as of its baselayer allocation of Ethereum’s Proof of Work amounts to 98.7 kt of CO2e emissions.

1

Transparency notice: These two papers were co-authored by the founders of CCRI.
Transparency notice: The hybrid approach was developed by CCRI and South Pole under consultation with PayPal (CCRI,2022a). A more technical whitepaper is also available (Gallersdörfer, Klaaßen, & Stoll, 2021).
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The Energy Efficiency and Carbon Footprint of the Polygon Blockchain

III.

Impact of the Merge on Polygon’s environmental
sustainability

1. Influence of the Ethereum Merge on the Polygon network emissions
In our initial report, we estimated the CO2e emission allocation for Polygon on the pre-Merge Ethereum
network to be 60,903 tonnes CO2e from 01st August 2021 to 31st July 2022 (CCRI, 2022d). We furthermore
approximated the emissions of Polygon’s PoS network to be 50.13 tonnes CO2e for the same period. Thus, weconcluded that most of Polygon’s emissions (99.92 %) are due to activities on the base layer network
Ethereum.
Given that Ethereum has switched from Proof of Work to Proof of Stake on 15th September 2022, an event, whichis referred to as “The Merge”, the electricity consumption and thus the carbon footprint of the Ethereum
network has been reduced significantly. CCRI has analyzed the impact of Ethereum’s Merge and providedresults on the electricity consumption and carbon footprint of the post-Merge network (CCRI, 2022f). Our
calculations take the client diversity within the Ethereum network into account and develop a best guessestimate for the electricity consumption of an average node participating in the network. Table 2 summarizes
the estimates for Ethereum PoW before and Ethereum PoS after the Merge.
Ethereum PoW
Electricity consumption [MWh/year]
CO2e emissions [t/year]

Ethereum PoS

Reduction

22,900,320

2,600.86

99.988 %11,016,000

869.7899.992 %Table 2: Comparison of annualized electricity consumption and CO2e emissionsof the Ethereum network before (PoW) and after (PoS) the Merge
We found that the annualized electricity consumption of Ethereum is reduced by 99.988 %, corresponding toa reduction factor of over 8,639. Similarly, Ethereum’s CO2e emissions are reduced by a factor of over 12,425(99.992 %). As a result, the emissions Polygon causes on its base layer Ethereum are likewise reduced
substantially: Applying the reduction factor we have determined, Polygon’s activities on the post-Merge
Ethereum base layer amount to 4.87 tonnes CO2e. Table 3 summarizes the influence of Ethereum’s Merge on
the carbon footprint of the Polygon layer-2 network.

CO2e emissions layer 1 allocation [t/year] (overall share)CO2e emissions layer 2 PoS network [t/year] (overall share)

pre-Merge

post-Merge

60,903 (99.92 %)4.87 (8.85 %)50.13 (0.08 %)50.13 (91.15 %)

60,953.13

55.00

CO2e emissions Polygon total [t/year]

Table 3: Comparison of annualized carbon footprint of the Polygon network
before and after the Merge of the Ethereum base layer
We find that the share of Polygon’s emissions from its base layer activities is reduced from 99.92 % to 8.85 %because of Ethereum’s drop in electricity consumption and carbon footprint. In total, the annualized emissionsof the Polygon network after the Ethereum Merge amount to 55 tonnes CO2e.

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The Energy Efficiency and Carbon Footprint of the Polygon Blockchain

2. Comparison of Polygon “Post-Merge” network to other PoS systems
In the following, we contextualize our updated results for the Polygon network emissions after the Merge toother PoS systems. We also put the electricity consumption in context; for that, we leverage the carbon
intensity of 501 gCO2e/kWh as established in CCRI (2022d). We point out that comparing different Proof of
Stake networks is challenging: Different network sizes, transaction throughputs, and other capabilities such as
layer 2 networks or sidechains might add to the electricity consumption and carbon footprint of the respective
network.
Yearly electricity consumption in the context of other systems
In our previous report, we outlined that the yearly electricity consumption of the Polygon PoS network amounts
to roughly 109,213 kWh (CCRI, 2022d). The updated base layer allocation after Ethereum’s Merge adds further
9,720.56 kWh. An average US household consumes about 10,600 kWh per year and, therefore, the Polygon PoS
network consumes about 10.3 times the electricity, and the base layer allocation of Ethereum adds slightly
less than one further household (U.S. Energy Information Administration, 2021).
In comparison to the decentralized cryptocurrency Bitcoin, the Polygon PoS network consumes only about
0.00011 % of the Bitcoin network assuming 97.11 TWh on 15th September 2022 (CCRI, 2022b). Bitcoin consumes
much more electricity than Proof of Stake systems due to its Proof of Work consensus mechanism, resulting
in the deployment of energy-intensive hardware.
In Figure 1, we compare the Bitcoin network, the Ethereum for both pre-Merge (assuming 21.99 TWh on the 14thSeptember 2022 (CCRI, 2022b)) and post-Merge (assuming 0.0021 TWh on the 15th September 2022 (CCRI,2022b, 2022f)), TRON (CCRI, 2022e), and further PoS networks we have analyzed in CCRI (2022c). For theseadditional networks, we use updated values from our API (CCRI, 2022b). For comparison, we add an average
US household to the figure. Note that the networks drawn in gray are limited in their comparability given theage of the analysis (conducted from August to October 2021).

Figure 1: Yearly electricity consumption Polygon, Bitcoin, Ethereum pre- and post-Merge, Proof of Stake
networks TRON, Polkadot, Tezos, Avalanche, Algorand, Cardano, and Solana, and an average US household inkWh. Logarithmic scale.

CCRI 20227The Energy Efficiency and Carbon Footprint of the Polygon Blockchain

Carbon footprint in the context of other systems
Overall, the emissions of PoS networks are very low. As calculated in (CCRI, 2022d), the Polygon PoS networkemits 50.13 tons of CO2e yearly. For example, 8 round trips from Munich (MUC) to San Francisco (SFO) inbusiness class emit about the same amount of carbon dioxide (MyClimate, 2021) produced by the PoS
network of Polygon. Polygon is responsible for further 4.87 tonnes of CO2e on its base layer Ethereum after theMerge. This allocation on the post-Merge Ethereum base layer is slightly less than an additional round trip. It
can be assumed that the CO2e emissions of companies behind the networks are higher than the emissions
from the network itself.
Figure 2 compares the carbon footprints of Polygon, Ethereum post-Merge further PoS networks from ourprevious research (CCRI, 2022b, 2022c, 2022e, 2022f) and to a roundtrip MUC – SFO in business class. Again,
the gray-colored networks are only comparable to a limited extent due to the age of the analysis.

Figure 2: Yearly carbon footprint of Polygon compared to other PoS networks and toa roundtrip flight in business classAssessment of the previous report’s estimates
Overall, we find that the first indication in the initial report “Energy Efficiency and Carbon Footprint of thePolygon Blockchain” (CCRI, 2022d) overestimates the emissions of the Ethereum layer 1 post-Merge by about
20 %, resulting in a lower carbon footprint of the Polygon network post-Merge than initially anticipated. We
reduced our estimates for the allocated electricity consumption from 12,166 kWh to 9,721 kWh and theallocated carbon footprint from 6.09 to 4.87 tonnes CO2e.

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ReferencesCCRI.

(2022a). Accounting for Cryptocurrency Climate
ratings.com/dl/accounting-framework-2022

Impacts. Retrieved from https://carbon-CCRI. (2022b). CCRI Cryptocurrency Sustainability API. Retrieved from https://docs.api.carbon-ratings.com
CCRI. (2022c). Energy efficiency and carbon emissions of PoS Networks. . Retrieved from https://carbonratings.com/dl/pos-report-2022
CCRI. (2022d). Energy Efficiency and Carbon Footprint of the Polygon Blockchain. Retrieved fromhttps://carbon-ratings.com/polygon-report-2022
CCRI. (2022e). Energy Efficiency and Carbon Footprint of the TRON Blockchain . Retrieved from https://carbonratings.com/tron-report-2022
CCRI. (2022f). The Merge - Implications on the Electricity Consumption and Carbon Footprint of the Ethereum

Network. Retrieved from https://carbon-ratings.com/eth-report-2022
de Vries, A., Gallersdörfer, U., Klaaßen, L., & Stoll, C. (2022). Revisiting Bitcoin’s carbon footprint. Joule, 6(3), 498502.
Etherscan. (2022). Accounts Polygon (Matic). Retrieved from https://etherscan.io/accounts/label/polygonmaticGallersdörfer, U., Klaaßen, L., & Stoll, C. (2020). Energy consumption of cryptocurrencies beyond bitcoin. Joule,4(9), 1843-1846.
Gallersdörfer, U., Klaaßen, L., & Stoll, C. (2021). Accounting for carbon emissions caused by cryptocurrency andtoken systems. arXiv preprint arXiv:2111.06477.
MyClimate.
(2021).
CarbonFootprint

calculator.

Retrievedfromhttps://co2.myclimate.org/en/flight_calculators/new
Trueblocks. (2022). TrueBlocks Core. Retrieved from https://github.com/trueblocks/trueblocks-core

CCRI 20229The Energy Efficiency and Carbon Footprint of the Polygon Blockchain

About CCRI

CCRI – Crypto Carbon Ratings Institute – is a research-driven
company

providing

cryptocurrencies,

datablockchain

onandsustainability
otheraspectsoftechnologies.

Theinterdisciplinary team has built a multi-year research track record
with a specific focus on cryptocurrencies and their sustainability
impacts. CCRI uses the most up-to-date data sources as well as
methods based on formerly peer-reviewed studies published inrenowned scientific journals. CCRI provides insights that help theirclients to understand and manage crypto-related ESG exposure. They
serve a broad range of clients including institutional investors,
exchanges and blockchain networks.

© Crypto Carbon Ratings Institute, 2022
Crypto Carbon Ratings Institute (CCRI) is a brand of CCRI GmbH based in Dingolfing, Germany.

CCRI 2022

https://carbon-ratings.com10