Iceland Energy in Numbers

A country of under four hundred thousand people tops the world’s energy rankings, measure after measure. Iceland generates green power on a scale built for aluminium smelters, and burns imported oil on the scale required by an isolated, transoceanic airline hub with its own rather sizable fishing fleet.

Icelanders are pioneers in sustainable energy systems, and no other advanced economy gets a larger share of its energy from renewable sources.¹ It was not always so: in 1940 coal and peat supplied nearly three quarters of everything the country burned and geothermal under a tenth. A few currency and oil shocks later, today geothermal supplies 70%. Primary energy by source shows the share each energy source provides, not the total amount, which has increased significantly over the period, as is common with all nations in development.

Primary energy by source

· 1940–2020 · share of total

SOURCE 2 STATISTICS ICELAND

The electricity story alone is unusual. Every unit of it comes from either hydropower or geothermal steam, two baseload renewable energy sources, and has done every month for at least nine years: across the whole period electricity generation by source records 26.4 GWh from fuel, fifteen thousandths of one per cent of everything produced, and too small to draw at this scale. Green power production grew by a factor of 2.5 from 2005 to 2025, and Iceland now generates more electricity per person than any other country: 49,288 kilowatt hours a year for every person.³

Electricity generation by source

· 2017–2025 · GWh

SOURCE 4 UMHVERFIS- OG ORKUSTOFNUN

Geothermal is used for more than just power production. The resource is used to heat buildings and facilities during long winters, often using the hottest fluids to first generate power, before it is piped into large, fully renewable district heating systems. Geothermal direct heat by sector shows where the 46.71 petajoules of extracted geothermal heat ended up last year, including the estimated 10.25 PJ in losses which are further explained below.

There isn’t a place in the world that uses as much geothermal heat per capita. Iceland’s direct use comes to 99.1 terajoules a year for every thousand people, sixteen times more than Sweden, the next country on the list, there because it leads the world in ground-source heat pumps, an altogether different technology from the reservoir extraction practiced in Iceland.⁵

Geothermal direct heat by sector

· 2024 · petajoules

SOURCE 6 ORKUSPÁ ÍSLANDS 2025–50

Far more heat is drawn out of the ground than can ever be turned into useful energy. Sankey diagrams show a system’s energy flow from source to end use. The width of every band is proportional to the energy it carries, and transformation losses are often the single largest flow on any given Sankey diagram. But Iceland’s transformation losses are high even by international standards, and are due to high levels of geothermal energy, rather than being an indicator of waste. Icelanders would never veer from high use of geothermal because of its losses; they know better than anyone how quickly efficiency takes second place to sustainability and availability when countries are choosing their future energy paths.

Energy flow from source to end use

· 2024 · ktoe

SOURCE 7 EUROSTAT

Homes, offices and everything else draw a share of Iceland’s electricity, but the renewable power capacity was largely built out and financed through long term contracts with international aluminium and silica producers. Roughly three quarters of everything generated goes into making metal, despite the strong growth of data centres in recent years, as shown in electricity use by consumer.

Electricity use by consumer

· 2025 · GWh

SOURCE 6 ORKUSPÁ ÍSLANDS 2025–50

As a result, more renewable energy did not mean fewer emissions; quite the opposite, in fact, as both grew significantly over the period. Greenhouse gas emissions by category covers twenty years: industrial processes rose 111%. International aviation expanded by 137%, while emissions from energy fell only 13%, waste emissions decreased by 23% and agriculture barely moved.

Greenhouse gas emissions by category

· 2005–2024 · kt CO₂-eq

SOURCE 8 UMHVERFIS- OG ORKUSTOFNUN

As was expected industrial process emissions rose alongside the expanding smelting capacity, as emissions are chemical and inherent to the aluminium production process itself. Land use is excluded from the data, but for obvious reasons international aviation is shown. Official inventory conventions keep it separate from national totals, which is why the headline figure is usually quoted as 4,779 kt rather than the much higher 5,786.

Despite Iceland’s unusually large green grid and its high level of geothermal heating, the average Icelander still emits about twice as much as the average European. Oddly enough, an Icelander’s energy emissions sit only slightly below the European average, as the high level of green power production nets out against a high level of oil use in transport. Emissions per person by category draws the two to the same scale, so the European column stands at about half the height of the Icelandic one.

Emissions per person by category

· 2024 · tonnes CO₂-eq

SOURCE 9 EUROSTAT AND EEA

Electrification of the car fleet

· passenger cars · 2021–2025

SOURCE 10 EUROPEAN ALTERNATIVE FUELS OBSERVATORY

It is industry and aviation, each roughly nine times higher, that account for most of the difference. Both sit partly under the EU Emissions Trading System: the smelters are covered directly, as are flights within the European Economic Area. On the roads, electrification is partial. Two in five new cars sold in Iceland are electric, a rate few countries match, but the electrification of the car fleet has some way to go, as only one car in seven on the road is electric. The sales share tracks the tax code more than it tracks Icelanders’ desire to go electric. EV sales reached 57% of the whole in 2023 as buyers moved ahead of the expiry of the VAT exemption on electric cars, fell to 26% in 2024 when a flat grant, an excise duty and a per-kilometre charge replaced it, and recovered to 41% in 2025. Private buyers reached 67%. The car rental companies import four of every ten new cars sold in the country and buy mostly hybrids.

Aviation is a larger exception still. Jet fuel consumption per person puts Iceland at more than nine times the European average, nearly all of it passing through one airport. At sea, two trends run in opposite directions: fuel sold to the fishing fleet has fallen by nearly half since its 1996 peak, while fuel sold to merchant shipping has risen more than sixfold since 1982; maritime and fishing fuel puts the two on one chart. The merchant traffic carries an opportunity to provide the local fleet with low-cost renewable options: FuelEU Maritime requires ships calling at European ports to cut the greenhouse gas intensity of the energy they use, and fuel produced in Iceland could meet that requirement where the ships already refuel. Only the Faroe Islands have more fishing vessels per capita: Iceland is second in Europe, with more than twice as many per head as Croatia, the country that follows. As with aviation, transforming the fishing fleet’s energy source is as much an energy security requirement as it is a climate necessity.¹¹

Jet fuel consumption

· 2024

SOURCE 12 EUROSTAT

Maritime and fishing fuel

· 1982–2024

SOURCE 13 UMHVERFIS- OG ORKUSTOFNUN

Close to a million tonnes of fossil fuel is still burned in Iceland every year, and fossil fuel use by category puts 61% of it into the applications a power line cannot reach: aircraft, trawlers and ships. Road transport takes most of the rest. The grid was built once already, by people who drilled into volcanoes when easier options existed. With fuel production technology developing quickly at the global level, the green fuel production facilities needed to decrease emissions and keep the island’s aviation and maritime sectors competitive in the long term are finally becoming technically feasible and economically sensible.

Fossil fuel use by category

· 2025 · tonnes

SOURCES 14 STATISTICS ICELAND · 6 ORKUSPÁ ÍSLANDS 2025–50

Icelanders transformed their grid and heating before it was a given. Fuel is the piece that remains.