What will change in Iceland in 2024?

New Year's Eve Fireworks in Reykjavík, 2017.

A new year and a new beginning, so they say. 2024 comes with many changes to public price structures all over Iceland, a historic milestone in the population size and also some restructuring in leadership within the country. Here’s all you need to know about the upcoming changes in 2024 in Iceland.

Iceland’s population will reach 400,000 & election of new president

It is predicted that within the first six months of 2024, Iceland’s population will surpass 400,000 people. Currently, the population is only 1,000 people away from that mark. According to Statistics Iceland, the growth has been more rapid than expected as reaching a population of 400,000 was initially predicted in the year 2050.

Iceland’s president Guðni Th. Jóhannesson has announced that he will not run for president again, stepping down after two terms (8 years) in office. A new president will be elected in June. Currently, no one has announced their candidacy in the upcoming election.

The mayor of Reykjavík Dagur B. Eggertsson has also announced that he will step down from his position on January 16. He was Reykjavík’s mayor for the last ten years. Progressive Party Leader Einar Þorsteinsson will take over as mayor until the next election in 2026.

President Guðni Th. Jóhannesson

Pool prices and garbage disposal fees hike

Municipalities in Iceland have announced higher prices for trash collection, as a new system for sorting refuse is being implemented in the capital area. The biggest increase is in Reykjavík, where the price for two bins goes from ISK 52,600 [$389, €350] to ISK 73,500 [$544, €489]. The highest fee remains in the more affluent neighbouring municipality of Seltjarnarnes and amounts to ISK 75,000 [$555, €499]. From January 10, it also won’t be possible to collect disposable paper bags for the biodegradable trash free of charge from the supermarkets anymore. They can be picked up at the recycling centre Sorpa or the second-hand furniture store Góði hirðirinn instead and are still free of charge there.

In Reykjavík, the prices for trips to the swimming pool, museum tickets and petting zoo admissions in Laugardalur have also gone up. A single adult ticket to a public pool increased by 6 per cent and will now cost ISK 1,330 [$10, €9]. Yearly tickets go up by 5.5 per cent, while prices for towel and swimming trunk rentals also rise. 

A hike in bus fare prices for the public transport company Strætó has also been announced. Stræto operates the city buses in the Reykjavík capital region. They will rise by an average of 11 per cent with a single ticket now costing ISK 630  [$4.60, €4.20] from ISK 570 [$4.20, €3.80]. The increase has been justified by citing higher fuel prices. The buses outside the capital area are not affected by those changes.

Úlfarsárdalur swimming pool Dagur B. Eggertsson mayor

Tax rates on substances & electric vehicles increase

Municipalities have also upped the fees for some of the services they offer, while the 2024 budget, recently approved by Alþingi, heralds new taxes and adjustments to the existing ones. Tax rates on alcohol and tobacco go up by 3.5 per cent, Morgunblaðið reports. As does the licensing fee for public broadcasting and the gasoline tax. 

The litre will cost an extra ISK 4.20 [$0.03, €0.03], while the litre of diesel goes up by ISK 3.70 [$0.03, €0.02]. The vehicle tax on lighter automobiles rises by 30 per cent as well, while owners of electric cars will need to pay a new fee per kilometre, which for the average driver will amount to ISK 90,000 [$666, €599] per year. 

Owners of hybrid, electric and hydrogen vehicles will now need to keep track of the mileage of their vehicles and register them on island.is in the beginning of 2024. This procedure must be repeated once a year. The Icelandic government decided to implement this change due to a stark decrease in the state’s revenue from vehicles since 2018 and the ongoing need for the development of road infrastructure. The kilometre fee will be paid monthly. People concerned by this change can visit the government-run website Vegir okkar allra to find out more about this change.

Keflavík Airport
Keflavík Airport

EU travel fee not coming into effect until 2025

The by the EU announced ETIAS waiver program that was initially announced to come into effect in 2024 has been postponed to 2025. So travellers from outside of the EU are not facing registration fees of $7.70 / €7.00 just yet. ETIAS travel authorisation is an entry requirement for visa-exempt travellers who are visiting one of the thirty participating European countries. The entry requirement is valid for up to 90 days in any 180 days. Travellers intending to visit Iceland will also need an ETIAS travel authorisation to enter Iceland from 2025 on. This system will not replace visa requirements for citizens who currently require a visa to visit any EU country, like travellers from China, India and South Africa. 

A central database which will track non-EU residents when entering any EU country called the Entry/Exit system, will presumably come into force in the second half of 2024.

 

Dairy Price Hikes Spark Discussion on Industry Structure

The price of dairy products has risen 16% over the past year, well above inflation rates. At the same time, Auðhumla, the parent company of MS Iceland Dairies, which buys almost 100% of all milk produced in Iceland, reported record profits last year and an increase of ISK 4 billion [$29 million, €26.5 million] in operational profits between years. The CEO of MS Iceland Dairies told RÚV production costs have also risen and there is little real profit in the industry.

In Focus: Iceland’s Dairy Industry

Dairy consumption in Iceland is 60% higher than the European average, according to figures from MS Iceland Dairies. With inflation and rising food prices across the board, the increase in the cost of dairy products is felt strongly by local consumers.

The CEO of MS Iceland Dairies, Pálmi Vilhjálmsson, says that the company’s operational surplus is less than 1% of the company’s gross income. He stated that profits were small in the industry and that equipment costs were high relative to the production of other food products, and that rising prices of grain, fertiliser, electricity, and oil affected dairy prices.

Rafn Bergsson of the Icelandic Farmers Association says cow farmers have absorbed many of these rising costs and that further price hikes would be needed to improve their income and working conditions. Dairy prices are set by a government committee, and Minister of Food, Agriculture, and Fisheries Svandís Svavarsdóttir says there is reason to review that system, which may be out of date. “If neither consumers nor farmers benefit from the arrangement, where does the profit lie?” Svandís stated. She called on intermediaries to take responsibility for the situation instead of taking advantage of monopolies to raise prices for consumers.