A key aspect of Iceland’s energy transition is exploring the uses of renewable energy in transportation.
As can be seen from the graph below, electricity currently leads the way as the preferred renewable energy. Recent advances in the viability of private electric vehicles and Iceland’s plentiful geothermal and hydroelectric energy facilities have meant that, for Iceland, the future is mostly looking electric.
There are, however, efforts being made to investigate the viability of biofuel production in Iceland from industrial and household waste. Under a new recycling regulation, methane fuel will be also be produced from household waste.
Currently, road transport accounts for some 20% of GHG emissions in Iceland. Of this 20%, about 15% of GHG emissions come from freight vehicles. The National Energy Authority announced funding in May 2021 for heavy transportation projects. This funding will be used to purchase freight vehicles that use sustainable fuels or for infrastructure development that supports the use of renewable fuels for such vehicles. The National Energy Authority also announced project funding in May 2022 for heavy transportation, called “Electricity and Fuel Cells and Methane,” which includes both infrastructure and production. An Icelandic demonstration project for heavy transportation has also received funding from the Nordic Council of Ministers for Energy, which includes hydrogen refueling stations for freight vehicles.
Despite the overwhelming preference for electric energy, there is nevertheless significant growth in domestic production of renewable energy sources, including methanol production by CRI, and biodiesel production in waste management. Sorpa and Norðurorka produce biogas methane from landfill gas generated in the Reykjavik area and in Akureyri, which is used to fuel cars, buses, and waste disposal trucks.
However, despite the fact that biofuels will play a role in Iceland’s energy transition, because of the unique conditions of Icelandic energy production, it is not a priority and there are currently no set goals specifically for biofuel.
Read about the legal framework for Iceland’s energy transition at the National Energy Authority.
The most recent statistics on national energy consumption.