In 2021, Iceland’s economy was ranked 105th in the world in gross domestic product (GDP). The country’s economy is dependent on the export of raw aluminum, fresh fish, frozen fish, processed fish, fish oil, and animal meal.
In 2016, Iceland signed the “Paris Climate Agreement,” committing to reduce emissions across the region by 40% on 1990 levels by 2030.
In 2018, Prime Minister Katrín Jakobsdóttir launched Iceland’s Climate Action Plan which included measures ranging from increasing reforestation to banning new registration for fossil fuel cars by 2030. Iceland’s goal is to achieve carbon neutrality before 2040.
In 2020, the national power company, Landsvirkjun used only renewable energy (100%) to generate electricity in Iceland.Hydropower and geothermal are the primary types of renewable energy used to generate electricity in Iceland.
Recent renewable energy projects in Iceland include:
- 93 MW Hydropower Project – National power company, Landsvirkjun is continuing work on the Hvammur hydro power project in the southwest region of Iceland. The project is forecast to be commissioned in 2026.
- 90 MW Wind Project – In May 2022, Brazilian company, CPFL Energias Renováveis announced plans to build Iceland’s first utility scale onshore wind farm.
- Carbon Capture + Storage Project – In September 2021, Swiss company Climeworks and Icelandic company Carbfix completed the Orca direct air carbon capture and storage plant at a site approximately 15 miles southeast of the nation’s capital, Reykjavík. The plant is designed to capture 4,000 tons of CO2 per year.
Until the 1950s, Iceland used peat and dried sheep dung for cooking and heating due to a scarcity of wood. Horses provided transport and natural hot springs were used for washing and bathing.
Today, Iceland has transformed itself from an impoverished nation into thriving, modern country. Iceland’s miraculous transformation is a result of the nation harnessing the power of renewable energy.
Iceland’s quest for a carbon neutral economy has been remarkable!
Website – “Our Energy Conundrum”
Jack Kerfoot is a scientist, energy expert, and author of the book FUELING AMERICA, An Insider’s Journey and articles for The Hill, one of the largest independent political news sites in the United States. He has been interviewed on over 100 radio and television stations from New York City to Los Angeles on numerous energy related topics.
 World Bank, Access To Electricity (% Population) – Iceland
 Gross Domestic Product By Country 2021 – Worldometer
 The Observatory of Economic Complexity (OEC) – Iceland
 Carbon Brief – “2015: Tracking Country Climate Pledges”
 Government of Iceland, “Iceland’s Climate Action Plan for 2018 – 2030”, September 2018
 Our World In Data, Iceland: Energy Country Profile by Hanna Ritchie and Max Roser