{"id":188772,"date":"2026-05-19T15:54:39","date_gmt":"2026-05-19T13:54:39","guid":{"rendered":"https:\/\/www.esteri.it\/sala_stampa\/archivionotizie\/\/2026\/05\/islanda-sovranita-energetica-e-frontiere-tecnologiche-nel-quadrante-artico\/"},"modified":"2026-05-20T09:19:41","modified_gmt":"2026-05-20T07:19:41","slug":"islanda-sovranita-energetica-e-frontiere-tecnologiche-nel-quadrante-artico","status":"publish","type":"post","link":"https:\/\/www.esteri.it\/en\/sala_stampa\/archivionotizie\/diplomazia-economica\/2026\/05\/islanda-sovranita-energetica-e-frontiere-tecnologiche-nel-quadrante-artico\/","title":{"rendered":"Iceland, Energy Sovereignty and Technological Frontiers in the Arctic"},"content":{"rendered":"

Iceland has consolidated a profile of political and economic stability, definitively overcoming the 2008-2011 financial crisis to position itself as a market free from the significant commercial risks of the past. The geological structure<\/strong> of the territory, however, requires constant monitoring of seismic and volcanic phenomena, which are the only variable of structural uncertainty.<\/p>\n

With a population of approximately 400,000 and a density of only three inhabitants per square kilometre, the country faces unique demographic and logistical challenges. The workforce is characterized by an average age of 38 and a high level of education<\/strong>, with approximately 41% of employed people holding a university degree. This dynamism is also fuelled by a sustained flow of immigration<\/strong> since the late 1990s, which has boosted productivity and met the demand for labour in fast growing sectors, although it has also put significant pressure on the real estate market <\/strong>and the availability of social and affordable housing.<\/p>\n

Iceland’s economic model draws a key competitive advantage from its energy infrastructure, which relies entirely on renewable sources<\/strong>: hydroelectricity accounts for 70% of production, while geothermal energy provides the remaining 30%. This configuration allows for competitively priced energy for energy-intensive industries and data centre development, supported by a reliable distribution network and fibre-optic connectivity<\/strong> linking the country to Europe and North America.<\/p>\n

 <\/p>\n

Iceland\u2019s energy demand will exceed planned supply<\/strong><\/p>\n

With a view to diversifying its production structure and bridge the gap with larger economies, the government has introduced a system of tax incentives<\/strong> that envisages a corporate income tax rate of 20%, lower than the OECD average, and a tax credit of up to 35% for documented research and development expenses. These initiatives aim to stimulate the expansion of high-value sectors<\/strong>, such as life sciences, biotechnology, health technology, and pharmaceuticals, with particular emphasis on human genetics, stem cells, and oncology.<\/p>\n

Iceland\u2019s ecosystem is also geared toward innovation, fostered by integration into the European Economic Area (EEA),<\/strong> which ensures the free movement of capital, goods, and services. The EEA, established in 1994, extends the EU Single Market to Iceland, Liechtenstein, and Norway.<\/p>\n

 <\/p>\n

Strategic Convergence in the Energy Transition<\/strong><\/p>\n

Trade between Italy and Iceland in 2025 reaffirmed the prominent position of Made in Italy products. Italy is the country’s 14th largest supplier with a 2.5% market share in 2025. Compared to its main European competitors, Italy is on an equal footing with France (2.48%) and ahead of Spain (1.75%),<\/strong> although it remains behind Germany (8.60%) and the United Kingdom (3.58%).<\/p>\n

Italian exports are concentrated in metallurgy for the local steel industry<\/strong> – where multinationals such as Alcoa and Rio Tinto operate – as well as mechanical machinery, electrical equipment, motor vehicles, and food products.<\/strong> Conversely, imports from Iceland primarily concern seafood products – which are fundamental for the Icelandic economy, accounting for almost 40% of the country’s total exports – aluminium, and pharmaceutical preparations<\/strong>.<\/p>\n

The dynamism of the Icelandic market is demonstrated by the strong recovery in net foreign direct investment (FDI), which rose from -$928 million in 2020 to $1.4 billion in 2023. In 2025 inflows are forecast to reach $578 million, with a projection of $609 million for 2026.<\/p>\n

A strategic pillar of bilateral cooperation is the energy sector, formalized through the Memorandum of Understanding on Geothermal Cooperation<\/strong> signed in Reykjavik on October 17, 2024. The agreement defines the legal framework for collaboration between public and private entities in the exploration and exploitation of resources for electricity generation, district heating, and power plant operation, combining Iceland\u2019s know-how with Italian industrial expertise in energy conversion.<\/p>\n

In the infrastructure sector, the need to support the expansion of tourism<\/strong> – which in 2025 saw more than 87,000 arrivals from Italy, equal to 3.8% of total foreign visitors, making Italy the sixth largest market of origin – requires long-term investment to adapt the transport network<\/strong> to the massive inflow of visitors. This is the context for the operations of Italian companies such as the construction company Rizzani de Eccher, which has won several contracts in the country, and TDK Foil Italy, active in the production of aluminium in Akureyri. In the digital sector, the Sia group (Nexi) has created the platform for instant e-payments for the Central Bank of Iceland.<\/p>\n

Further growth opportunities are identified in the blue bioeconomy<\/strong>, particularly in the use of geothermal wastewater for fish farming and the harvesting of algae for nutraceuticals and cosmetics.<\/p>\n

 <\/p>\n

Referendum on the possible resumption of EU accession negotiations in August<\/strong><\/p>\n

Iceland\u2019s government decided in March to submit to the Althingi, the Icelandic Parliament, a motion for resolution proposing a referendum on August 29, 2026, on the resumption of accession negotiations with the European Union (EU).<\/p>\n

The upcoming referendum will ask the Icelandic people whether Iceland should resume EU accession negotiations. If a “yes” vote prevails, this referendum would only be the first step in a negotiation process<\/strong>. A second vote would subsequently decide on actual EU membership, once negotiations are concluded and a treaty is reached.<\/p>\n

Iceland, located at the crossroads of Greenland, Russia, the United States, Canada, and Europe, applied for EU membership in 2009, and negotiations took place between 2010 and 2013 before being interrupted. Eleven years later, with the resurgence of power rivalries and the growing militarization of the Arctic, the country is a key hub for maritime routes<\/strong>.<\/p>\n

Bearing this in mind, a few weeks ago the EU and Iceland signed a Security and Defence Partnership Agreement<\/strong>. This partnership, which will further strengthen bilateral cooperation, will be based on a series of dialogue and consultation mechanisms to facilitate the exchange of information and provide guidance and supervision, including an annual dedicated security and defence dialogue.<\/p>\n

 <\/p>\n

Direct CO2<\/sub> Capture: An Icelandic Technology for Achieving Carbon Neutrality<\/strong><\/p>\n

Direct CO2<\/sub> capture is a technology consisting in filtering gaseous carbon dioxide from the air and storing it in rock formations or using it as a climate-neutral feedstock<\/strong> for a wide range of products, from beverages to chemicals, and synthetic aviation fuels.<\/p>\n

Iceland is currently home to the world’s largest direct CO2<\/sub><\/strong> capture facility<\/strong>. Operated since September 2021 by the Icelandic-Swiss joint venture Climeworks-Carbfix, the “Orca” facility captures approximately 4,000 tons of CO2<\/sub> per year and stores it underground in basalt formations. The facility is located near a geothermal power plant, allowing it to draw on reliable and affordable energy and inject the captured CO2<\/sub> back into the ground.<\/p>\n

The costs of reducing CO2<\/sub> emissions through direct capture are currently estimated at between $200 and $700 per ton. If these costs were reduced to between $125 and $335 per ton at large capture facilities removing more than a million tons of CO2<\/sub> per year, this system could become a competitive factor in the transition to carbon neutrality<\/strong> in Iceland and elsewhere.<\/p>\n","protected":false},"excerpt":{"rendered":"Iceland has consolidated a profile of political and economic stability, definitively overcoming the 2008-2011 financial crisis to position itself as a market free from the significant commercial risks of the past. The geological structure of the territory, however, requires constant monitoring of seismic and volcanic phenomena, which are the only variable of structural uncertainty. With […]","protected":false},"author":6,"featured_media":188727,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[417],"tags":[3,9],"class_list":["post-188772","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-diplomazia-economica","tag-diplomazia-economica","tag-europa"],"_links":{"self":[{"href":"https:\/\/www.esteri.it\/en\/wp-json\/wp\/v2\/posts\/188772","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.esteri.it\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.esteri.it\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.esteri.it\/en\/wp-json\/wp\/v2\/users\/6"}],"replies":[{"embeddable":true,"href":"https:\/\/www.esteri.it\/en\/wp-json\/wp\/v2\/comments?post=188772"}],"version-history":[{"count":1,"href":"https:\/\/www.esteri.it\/en\/wp-json\/wp\/v2\/posts\/188772\/revisions"}],"predecessor-version":[{"id":188773,"href":"https:\/\/www.esteri.it\/en\/wp-json\/wp\/v2\/posts\/188772\/revisions\/188773"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.esteri.it\/en\/wp-json\/wp\/v2\/media\/188727"}],"wp:attachment":[{"href":"https:\/\/www.esteri.it\/en\/wp-json\/wp\/v2\/media?parent=188772"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.esteri.it\/en\/wp-json\/wp\/v2\/categories?post=188772"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.esteri.it\/en\/wp-json\/wp\/v2\/tags?post=188772"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}