Feasibility of Biofuel Factory in North Iceland Studied Skip to content

Feasibility of Biofuel Factory in North Iceland Studied

By Iceland Review

Landsvirkjun, the national power company, and Icelandic-American company Carbon Recycling International (CRI), have agreed to conduct a joint feasibility study for constructing and operating a plant to produce renewable methanol (RM) next to the geothermal power plant at Krafla in northeast Iceland.


RM can be blended with gasoline or for production of biodiesel to make cleaner fuel for cars. Photo by Páll Stefánsson.

The plant would at full capacity produce more than 100 million liters annually of RM, a clean burning high octane fuel for cars, using only carbon dioxide (CO2), water and renewable energy from the Krafla plant. The process would eliminate 45,000 tons of CO2 emissions per year.

The feasibility study is expected to be concluded in February 2011. Provided that the study is successful, parties reach mutually beneficial agreements and necessary permits are obtained, preparations for the engineering and site preparation of the CRI plant at Krafla may start in the first half of 2011.

Landsvirkjun and CRI recently presented details of the feasibility studies and plans for fuel production to the local district council, Nordurthing.

According to ruv.is, the feasibility study came as a surprise to the council’s members, as confirmed by its chairman Jón Helgi Björnsson this week. He declared that he is dissatisfied with Landsvirkjun’s work methods.

On Monday, Sigmundur Ernir Rúnarsson, Social Democrat MP from the Northeast constituency, requested a meeting with the Althingi parliament’s Industry Committee to discuss the matter.

In his request to the committee’s members he wrote that if plans of a RM factory by Krafla are carried through, there may not be enough energy left for powering an aluminum smelter at Bakki near Húsavík, which has been planned for some time.

The technology, developed by CRI, for recycling CO2 to make liquid fuel has the potential to make Iceland less dependent on the import of fossil fuel, decrease the emission of greenhouse gases and increase the profitability of Icelandic geothermal plants, as described in a press release.

RM can be blended with gasoline or for production of biodiesel to make cleaner fuel for cars and other vehicles without any adjustment to existing engines or distribution stations.

CRI is currently constructing a RM fuel plant at Svartsengi in southwest Iceland in cooperation with HS Orka. The plant, which is the first of its kind in the world, is scheduled to launch operations in the spring of 2011.

CRI and HS Orka have also been exploring the opportunity to construct a larger scale fuel plant using energy from the Eldvörp area, near Svartsengi.

Landsvirkjun, the largest power producer in Iceland with over 1,900 MWe of installed hydro and geothermal capacity, was founded in 1965 and is a public partnership, fully owned by the Icelandic state and controlled by the Ministry of Finance.

Krafla, the oldest geothermal power station in Iceland, with a capacity of 60 MWe, is located near lake Mývatn in northeast Iceland and has been in operation since 1977.

Carbon Recycling International has been operating since 2006 and is majority owned by Icelandic investors. Its headquarters are in Reykjavík.

Click here to read more about the planned Svartsengi RM plant and here to read more about the planned aluminum smelter at Bakki.

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