The Cambridge Centre for Alternative Finance (CCAF) has found that Ethereum’s energy consumption plunged by 99.98% following The Merge, marking a major sustainability achievement. However, the report notes that institutional concerns are now shifting from energy usage to potential risks around node concentration and network infrastructure.

Released in June 2026, CCAF’s report Ethereum After the Merge – A Change in Power examined the impact of Ethereum’s transition from proof-of-work to proof-of-stake. The study found that the network’s annual power demand declined from 2.4 gigawatts before The Merge to just 7.87 gigawatt-hours annually after the upgrade, equal to roughly 0.90 megawatts of continuous electricity use.

Ethereum’s carbon emissions also experienced a dramatic decline, falling from 10.3 million tonnes of CO₂ equivalent to approximately 2.37 thousand tonnes. According to CCAF, the reduction represents a 99.98% decrease achieved through a single change in the blockchain’s underlying architecture.

The findings demonstrate the scale of Ethereum’s September 2022 transition, when the network replaced proof-of-work mining with proof-of-stake validation. The upgrade eliminated energy-intensive mining operations and became one of the largest efficiency improvements ever seen among major blockchain networks, improving Ethereum’s position in ESG assessments used by institutional investors.

Ethereum’s Post-Merge Energy Profile

CCAF’s analysis used a network-weighted average estimate of 105 watts per node, with calculations based on observed network activity rather than projections.

The report highlighted Ethereum’s energy transformation through comparisons with familiar benchmarks. Before The Merge, Ethereum consumed electricity at levels comparable to Iceland’s national power demand. After switching to proof-of-stake, the network’s annual energy footprint became similar to the electricity consumption of the Eiffel Tower.

Ethereum’s current energy usage is also tiny compared with traditional financial infrastructure. CCAF estimates that banking systems, including branches, ATMs, and data centers, consume around 260 terawatt-hours of electricity each year. Ethereum’s post-Merge requirement of 7.87 gigawatt-hours is roughly 33,000 times smaller.

The network’s environmental impact has also been reduced significantly, with annual emissions now estimated at only 2.37 kilotonnes of CO₂ equivalent.

In comparisons with other blockchain networks, Ethereum’s energy demand is lower than Solana, which uses more than 13.4 GWh annually, but higher than NEAR Protocol, which consumes about 5.11 GWh. CCAF noted that Ethereum remains highly efficient when its energy consumption is measured against its economic importance and network activity.

Infrastructure Becomes the New Risk Factor

The CCAF findings suggest that Ethereum’s environmental impact is no longer the primary concern for institutions. Instead, attention is moving toward whether the network’s validator and node infrastructure is sufficiently decentralized and resilient.

The report points to possible risks involving node distribution, including geographic concentration and dependence on a small number of cloud service providers. While Ethereum has successfully addressed its energy challenges, these infrastructure dependencies introduce new areas for institutional review.

Validator locations, hosting providers, and network participation patterns are expected to become increasingly important factors in assessing Ethereum’s long-term reliability.

The report may help Ethereum overcome ESG-related objections from investors who previously avoided proof-of-work networks due to energy concerns. However, institutional risk teams are likely to continue examining decentralization, infrastructure resilience, and ecosystem sustainability before fully accepting Ethereum as a low-risk blockchain asset.