Inside a small, geodesic dome near Iceland’s Hellisheiði geothermal power station, water full of carbon dioxide is being pumped hundreds of metres down into the porous basalt. At least, I am assured it is: the water is so clear that the pipe looks empty when I peer through a viewing window at it. The CO2 will react with metals in the rock and turn into carbonates, locking it away safely for millennia.
For Iceland, this project is a way to help achieve its aim of becoming carbon neutral by 2040. Given that the nation is responsible for just 0.01 per cent of global carbon emissions, this isn’t going to make much difference by itself. But technologies like this that are being developed and tested in Iceland are helping many other countries go green too.
Iceland has already gone further towards becoming renewable than just about any other nation. It started in the 1930s, with the first project providing hot water for a swimming pool, school and hospital in Reykjavik.
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When an energy crisis hit in the 1970s, the Icelandic government accelerated the development of geothermal and hydropower. Today, its electricity comes almost entirely from renewable sources, with around 70 per cent from hydropower and 30 per cent from geothermal plants. This means Iceland is one of the .
What’s more, nearly is provided by hot water from geothermal plants, with most of the remainder coming from electricity and just a few isolated buildings still using oil boilers. This puts Iceland well ahead of other nations: in the European Union, renewables provide and cooling energy on average.
With the current energy crisis, the benefits of going renewable are greater than ever. While soaring energy costs in many places are hitting people and businesses hard, in Iceland, they remain low. “We have 20-year price stability,” says Dagný Jónsdóttir at geothermal company HS Orka. This cheap, green power has attracted businesses such as data centres to Iceland, and that is only increasing, she says. “We are getting a lot more interest from Europe because of the crazy electricity prices.”
Yet Iceland still has a long way to go to become carbon neutral. In fact, if you count emissions from land use, by some estimates, Iceland has the , at 41 tonnes of CO2 or equivalent per year.
However, this doesn’t reflect the carbon footprints of individuals. More than half of this is emissions triggered by the draining of wetlands for farmland from the 1950s, with carbon still being released as the land dries. To address this, the Icelandic government plans to reflood wetlands and step up reforestation.
Even excluding land use, Iceland’s per capita emissions are higher than most other European countries. Yet much of this is to do with heavy industries, such as aluminium smelting. While this smelting uses renewable electricity, it still relies on carbon electrodes that burn up during the process, releasing large amounts of CO2. Several companies, including an Icelandic one called Arctus, are that get rid of the carbon electrodes and the carbon emissions.
In general, however, by using renewable electricity to run data centres or produce products that are then sold abroad, Iceland is effectively exporting its green economy to the rest of the world. “The export of energy in Iceland is through products,” says JÓnsdÓttir.
“All parties in Iceland are behind the effort to go green, thanks to the energy crisis”
That said, there is debate in Iceland over the extent to which it should expand energy production to support industries. There is plenty of power left to tap, but there is a catch. “The best geothermal sites are in the most picturesque sites,” says Bjarni Richter at Iceland GeoSurvey, a state-owned company.
After industry, next on the list of emissions sources is transport. In Iceland, the greening of transport is referred to as the third energy transition, after electricity and heating. For cars, this is relatively straightforward. Iceland is second in the world behind Norway in electric cars per capita, with sales of petrol and diesel cars due to end in 2030.
Even domestic flights could go green. Icelandair began testing a in 2022 and is looking into . The short range of such planes is less of a problem for a small country like Iceland, but overseas flights bringing tourists there remain a bigger challenge.
More problematic is Iceland’s massive fishing fleet. One way to green the fleet would be switching to renewable methanol. In 2012, an Icelandic company called Carbon Recycling International (CRI) built the first ever renewable methanol factory next to the HS Orka geothermal plant at Svartsengi – the source of the water that creates Iceland’s famous Blue Lagoon. This small demonstration plant split water to make hydrogen, then combined this with small amounts of CO2 from the geothermal plant, which is brought up by the hot water, to make “e-methanol”.
However, the Svartsengi geothermal plant doesn’t bring up enough CO2 to make commercial-scale production of methanol viable at this site. “We decided to focus our resources on supporting the deployment of our technology at a larger and global scale,” says Kristjana KristjánsdÓttir at CRI.
The company designed the first commercial-scale factory for turning CO2 and hydrogen into methanol, which began operating in China last November. This plant turns waste CO2 from industry into 110,000 tonnes of methanol per year, replacing methanol usually made from coal. CRI estimates that it will reduce CO2 emissions by 500,000 tonnes a year and has already begun work on a second plant in China.
While CRI is turning CO2 into fuel, CarbFix – the company behind the pumping project I saw – is focused on storing it safely underground. “This is not [just] a promising idea, it’s a tried-and-tested method,” says Ólafur Teitur Guðnason at CarbFix, who hands me cores from drilling that show how the porous black rock beneath Hellisheiði fills up with white carbonates as the CO2-rich water percolates through it.
For the Hellisheiði plant, CarbFix provides a way to safely dispose of the CO2 that comes up with the hot water. The firm is also needed to import CO2 from Europe for mineralisation beneath Iceland. It aims to inject 3 million tonnes a year by 2031, and hopes to use the process at the many other suitable sites for mineralisation found around the world. Vast quantities of CO2 could be locked away using the CarbFix approach, says Guðnason. “The potential is enormous.”
Some of this CO2 could even be taken directly from the air. In fact, this is already happening on a tiny scale. Just a few hundred metres away from the HellisheiĂ°i plant is an array of what look like giant air conditioners. This is the direct-air-capture pilot plant of Swiss company Climeworks, which is powered by the geothermal plant and sends the captured CO2 to CarbFix to pump underground for mineralisation. There have been teething issues due to the severe Icelandic weather, but Climeworks is now planning to build a bigger plant in a location it has yet to reveal.
All of this makes it easy to see why other countries want to import Iceland’s geothermal expertise. For instance, a company in China called Sinopec Green Energy was co-founded by Reykjavik-based firm Arctic Green Energy. Sinopec is now the , providing centralised heating for 2 million people in more than 60 cities in China.
“Iceland is selling its know-how internationally,” says RĂkarĂ°ur RĂkarĂ°sson at Iceland’s national power company Landsvirkjun, which operates geothermal and hydro plants.
The soaring costs of heating in Europe have led to a surge of interest in geothermal, he says. While few countries have accessible sites that heat water to the high temperatures needed for generating electricity like Iceland, many have suitable locations for producing water warm enough for district heating systems.
In the UK, for instance, it has been suggested that geothermal could meet the country’s entire heating needs. It isn’t clear that the potential is this great, but it is certainly huge. And if Iceland’s experience is anything to go by, investing in geothermal could bring huge benefits in terms of clean, cheap heating.
“The energy crisis has given a huge boost to Iceland’s energy industry,” says Halla Hrund LogadÓttir, head of the National Energy Authority of Iceland. “All parties are behind the effort to go green, as they see the benefits more than ever thanks to the energy crisis.”
Michael Le Page’s trip was paid for by Green by Iceland, a government-funded organisation
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