Iceland falls far behind emissions targets, minister says

Iceland remains far from its greenhouse gas emissions targets, with emissions declining only slightly year on year and not in line with the country’s international commitments, mbl.is reports.

Emissions from road transport increased last year, with rental car fleets identified as the main challenge in reducing them.

Environment, Energy and Climate Minister Jóhann Páll Jóhannsson presented preliminary 2025 emissions figures at a press conference on Tuesday, along with planned government measures. A report by the steering group for climate action was also published.

The minister said new comprehensive climate legislation would be submitted to parliament next week. The legislation had been drafted from the ground up and would place greater emphasis on a scientific approach, while providing for clearer division of responsibilities and more effective implementation of climate measures.

“If we look at the big picture, the good news is that we are moving in the right direction, not the wrong one. We are seeing a slight overall decline from year to year,” Jóhannsson said.

“But the bad news is that we are far, far behind schedule. This needs to happen much, much faster if we are to achieve Iceland’s targets. That is simply the reality,” he said.

Jóhannsson described reducing greenhouse gas emissions as a major social challenge. He said rental car fleets were one of the biggest obstacles.

Emissions from road transport rose in 2025, which the minister called unacceptable. He said the situation could not be changed unless tourists began using electric cars.

“There are certain explanations for this that have to do with blending in fuel,” he said. “But that does not change the fact that this situation is not acceptable. This is precisely an area where the authorities should be able to have considerable influence through various policy instruments.”

Jóhannsson said the rental car fleet was one of Iceland’s biggest climate challenges. Only 14 percent of newly registered rental cars were electric, compared with 80 percent of newly registered cars purchased by Icelandic households.

He said rental companies bought around half of all newly registered cars, giving them a major influence over the development of the second-hand market.

Jóhannsson criticised his predecessor for providing rental companies with 10 billion Icelandic krónur in grants in the name of climate action, without results greater than those achieved.

He said he had been working to develop charging infrastructure and that measures in this area were being considered with other ministries.

“It could perhaps be said that Icelandic rental companies and the tourism sector are in a position where they can either lead the energy transition or hold it back,” he said, adding that he firmly believed the former was the case.

Jóhannsson said increased charging infrastructure for electric cars was supporting the energy transition. He cited several measures already taken by the government, including what he described as the largest-ever allocation of grants for energy-transition projects from the Climate and Energy Fund, with 800 million krónur provided last autumn for charging infrastructure across the country.