// For Iceland
Seeing the Iceland eSAF Project realised would bring a clear list of benefits to Icelanders. The prosperity of investment and jobs that stay here, resilience against fuel supply shocks, and the sovereignty of self-reliance.
Iceland uses more fuel per capita than almost anyone, all of it imported. The technology now exists to make fuel from renewable resources, and for the first time, fuel security is within reach.
Iceland's place as a transatlantic hub has been transformative: it connected a country of about 400,000 people to the world and built an entire economy on that connection. That connection runs on imported oil. Jet fuel alone was about 4% of the value of everything Iceland imported in 2025, about ISK 30 billion in a single year, bought abroad in foreign currency.1 Made at home, that spending becomes domestic activity: contracts, wages and income to Icelandic energy producers, staying in the economy instead of leaving it.
A jump in the world oil price is hard for any importer. For a small economy with its own currency it lands twice: once as a higher fuel price, and again as pressure on the króna that raises the cost of everything else Iceland buys abroad. The exposure is not theoretical. In 2026, disruption in the Strait of Hormuz doubled European jet fuel prices in under six months, in what the IEA called the largest disruption in the history of the global oil market.23 … read further
Iceland has no refinery and no domestic crude; aviation fuel arrives roughly every three weeks by ship, the country holds limited reserves against the international 90-day standard, and government analysis has shown jet fuel stocks at times falling below ten days, so there is no buffer beyond the next tanker.4 A domestic supply would hold as long as Iceland has water, power and carbon, and its cost would be decoupled from the next oil crisis.
Litres per capita per year · selected countries, Eurostat 2024
SourceEurostat 2024
This is a local project before it is a national one. Suðurnes accounts for close to half of all the fuel sold in Iceland, the jet fuel uplifted at Keflavík plus the peninsula's own road and marine use, more than any other region.5 The plant will be located in Kadeco's Green Industrial Park in Suðurnesjabær, with harbour access and services extending into Reykjanesbær, and it will share what it makes: the project's goal is to direct excess heat into the local system, adding a new heating source to the peninsula's energy supply, and the oxygen produced as a by-product of electrolysis can supply other businesses rather than being vented. … read further
The municipalities are involved, not bystanders. The project's stakeholder group has been at the table since 2022, with representatives from both municipalities, Kadeco, Icelandair, Icelandic Tank Storage and Isavia, and IðunnH2 holds signed MoUs with Icelandic Tank Storage, Kadeco, Suðurnesjabær, Reykjanesbær and Icelandair. Local jobs, local procurement, and an industry whose value stays in Suðurnes.
A 300 MW facility will be a major new electricity user, so how it draws its power matters. The project will buy new, contracted renewable power at full market price, and will reach a final decision only once that supply is secured, so nothing is taken from homes or existing industry.
Because electrolysis is one of the few large industrial loads that can be curtailed in seconds without damage, the plant will be able to hand its full demand back to the grid whenever the system needs it, serving as a demand-side reserve for homes, hospitals and critical infrastructure on Suðurnes.
The honest part of the bargain: new demand means new generation, on the public record about 100 new wind turbines across two or three sites. The project's long-term contracts are what let energy companies finance that buildout, and the turbines will stand where they can be seen. Fuel made at home, in exchange for new power built at home. We believe that trade serves Iceland well.
A new fuel industry is being built across Europe, and Iceland holds some of the best conditions in the world for it. Importing this fuel would make as much sense as importing cod or drinking water.
Start with what Iceland already has: renewable electricity at scale, abundant water, captured carbon, and more than a decade of commercial e-fuel production. Few countries hold better conditions for making synthetic fuel. … read further
The market is certain: from 2030 every major European airport, Keflavík included, must blend a rising share of synthetic aviation fuel, and the rules only decide that the fuel will be bought, not where it is made.6 The terms favour Iceland: eligible SAF at Icelandic airports is entitled to reimbursement of 100% of the price difference against fossil kerosene, the highest tier in the EEA.7 The industry will exist either way. The question is whether Iceland supplies SAF, or pays someone else to.
ReFuelEU mandate as a share of Iceland’s forecasted jet fuel demand, against the project’s planned production
SourceOrkuspá 2025; Reg (EU) 2023/2405
A first-of-a-kind plant on this scale is a major investment in a new global industry, at limited risk to the public purse. The project is currently privately funded and locally owned, but its construction will require specialised investors and EU support. … read further
When built, it will create about 70 permanent positions in operations, engineering, logistics, compliance and administration, alongside construction-phase employment and a supply chain of Icelandic firms across civils, port logistics and maintenance. One of the project's Icelandic partners, Carbon Recycling International, is among the world's oldest and most commercially successful e-methanol technology providers. The lasting return is the expertise: a workforce skilled in electrolysis, carbon capture and fuel synthesis holds the core skills of every clean-fuel pathway. Iceland built its geothermal know-how one project at a time, now it is exported world-wide.
Keflavík's status as a transatlantic hub is an asset, not a given. From 2030 the hubs that can supply synthetic fuel affordably will hold the advantage over those that cannot, and with the price gap entitled to full reimbursement, the premium that burdens other European hubs is neutralised here. … read further
Almost every visitor to Iceland, 98.7% of them, arrives through this one airport, and tourism accounted for about 8.8% of GDP in 2025.8 A significant share of Keflavík's passengers connect between continents without entering Iceland at all, traffic that depends on fuel being available and competitively priced at Keflavík itself.9 A clean, home-made supply, and the low-emission flying it makes possible, is something airlines can sell and travellers can choose, sharpening Keflavík's competitive edge.
Icelanders have always used what they have. The conditions now exist for Iceland to make its own fuel, with Icelandic technology for its own aviation, bringing real self-sufficiency.
Iceland's location made it strategically central to the North Atlantic long before it became a tourism hub. Yet the fuel at Keflavík arrives entirely from outside the alliance, across the sea lanes an adversary would target first.
Domestic production would change Iceland's position in that picture: the same facility that secures civilian aviation would create a sovereign fuel reserve capability and a tangible Icelandic contribution to allied security of supply. The volume is meaningful in alliance terms: 70,000 tonnes a year is equivalent to about a third of the Royal Air Force's entire annual aviation-fuel use.10 Synthetic aviation fuel is already cleared for NATO military aircraft at approved blend limits, and a reliable, low-emission fuel produced inside the alliance is precisely the resilience NATO is asking its members to build.11
// Quote
“All NATO Allies are committed to ensuring secure, resilient, and sustainable energy supplies, including fuel, to Allied military forces. SAF will play a key role in the Alliance's efforts to adapt to the ongoing energy transition while maintaining its military capability, effectiveness, and interoperability.
James Appathurai12
NATO Deputy Assistant Secretary General for Innovation, Hybrid and Cyber, July 2024
When Iceland turned to geothermal heat and hydropower, it was not only because they were efficient. It was because they were Iceland's own, and because, managed with care, they would last.
Those choices meant accepting near-term cost and risk so that later generations would inherit a better and more secure energy system, and the result is a country that runs on nearly 100% renewable electricity and heats almost every home without fossil fuel.13 Liquid fuel, for aviation, fisheries and heavy transport, is the one part of the energy system that buildout never reached: a dependency renewed one tanker at a time. The Iceland eSAF Project does not end that dependency overnight. It would make roughly 15% of the jet fuel projected at Keflavík in 2030, a first step at commercial scale, and the capability it would build, in engineering, operations and supply chains, would carry straight across to the fisheries, shipping and heavy transport that decarbonise next. Iceland already has the foundations: Carbon Recycling International has produced e-methanol commercially since 2012, other e-fuel projects are under development by capable Icelandic firms, and the government's legislated goal is a carbon-neutral Iceland by 2040, free of fossil fuels by 2050.14
There is only one way for Iceland's fuel sovereignty to begin to match the country's unrivaled sovereignty over its heat and power: by building one serious project at a time.
