How Sustainable Is Iceland? Renewable Energy and Green Living Explained

Iceland is widely recognised as one of the most sustainable countries in the world. From renewable electricity to environmentally conscious farming, the country has built an impressive reputation for protecting its natural environment.

But how sustainable is Iceland really? The answer lies in how the country integrates sustainability into everyday life. Energy production, food systems, transport, and recycling policies all play a role in making Iceland a global example of environmental responsibility.

In this guide, we explore how Iceland produces renewable energy, how the country supports sustainable agriculture, and how visitors can travel responsibly while exploring the island.

Renewable Energy in Iceland

The most important reason Iceland ranks among the world’s most sustainable countries is its energy system. Nearly all electricity produced in Iceland comes from renewable sources.

Hydroelectric power generates around 70% of the country’s electricity. Glacial rivers flowing from Iceland’s highlands power large hydroelectric plants that convert water movement into clean energy.

Iceland’s unique geology also provides another major energy source. Located between two tectonic plates, the country has significant geothermal activity, including many active volcanoes and geothermal systems.

Geothermal power accounts for roughly 30% of Iceland’s electricity production. Underground magma heats water deep below the surface, which is then used to generate electricity and heat buildings.

Reykjavík and surrounding towns rely heavily on geothermal heating. Large pipelines carry naturally heated water from underground reservoirs to homes, businesses, and swimming pools. Many geothermal landscapes can be explored across the country, including several famous geothermal areas in Iceland.

Energy companies are also experimenting with new technologies that capture carbon dioxide from geothermal plants, helping move the country closer to its goal of carbon neutrality.

Sustainable Agriculture and Food Production

Due to its climate, Iceland cannot grow many crops outdoors. Instead, the country has developed innovative methods for sustainable agriculture.

Many vegetables are grown in geothermally heated greenhouses. These facilities use renewable geothermal heat and LED lighting to create ideal growing conditions year round.

Vertical farming techniques allow growers to produce crops efficiently in limited space. Tomatoes, cucumbers, lettuce, herbs, and even bananas can be grown locally using this method.

Fishing is another important part of Iceland’s food system. The Icelandic fishing industry is tightly regulated to ensure fish populations remain sustainable. Scientific research and quota systems help prevent overfishing.

Traditional farming methods also contribute to sustainability. Icelandic sheep roam freely across the countryside during summer months, naturally grazing across large landscapes. This reduces the need for intensive farming practices.

To learn more about local cuisine and traditional foods, see our guide to food in Iceland.

Recycling and Waste Reduction

Iceland has introduced several policies aimed at reducing waste and encouraging recycling.

One of the most effective programs is the national bottle deposit system. Customers pay a small recycling fee when purchasing drinks, which is refunded when bottles or cans are returned to recycling machines located in supermarkets and stores.

Single use plastic restrictions were also introduced in 2021. Businesses now charge for items such as plastic straws, takeaway containers, and cutlery in order to reduce unnecessary waste.

These policies encourage both residents and visitors to make more environmentally responsible choices.

Sustainable Transport in Iceland

Transport is another area where Iceland is working toward sustainability. Reykjavík has expanded cycling infrastructure and introduced electric scooters and bike sharing programs to reduce car use within the city.

Public transport improvements are also underway. A Bus Rapid Transit system is being developed to create dedicated lanes for buses powered by electricity, methane, or hydrogen.

Visitors travelling around the country often choose to explore by car to reach remote landscapes, waterfalls, and national parks. Planning efficient routes and travelling responsibly can help minimise environmental impact.

If you plan to explore Iceland by road, our Driving in Iceland guide explains how to travel safely and responsibly.

You can find more travel tips and inspiration in our Explore Iceland guides.