A CO2 tax won't help when the issue is that the grids simply can't keep up with demand.
Other parts of Europe has a power surplus, but the grid's capacity simply isn't high enough to transfer all of it to the locations where it's needed.
As it turned out, the environmentalists' push to kill nuclear power wasn't that great since the plants were in the areas where the power was actually consumed.
It's a mess caused by a whole lot of varying factors, ranging from public utilities being sold out to international cartels who pocketed the income without investing in grid improvements, to the EV rollouts, to power plants being decomissioned. On top of that, you have Russia flexing their muscles, and if that conflict somehow escalates then Russian gas imports will be weaponized. I suspect the EU would like to be the ones doing the weaponizing and that means reducing the energy usage and fast.
Under those circumstances, proof-of-work crypto is simply low-hanging fruit and banning it will have a relatively large impact with a fairly small number of people being hit. People will prefer that to even higher energy prices, regardless if it's morally right or not.