Blue Lagoon chair calls debate over barrier costs “off the mark”

Blue Lagoon chairman Grímur Sæmundsen has called discussion of whether the company should help pay for the protective barriers at Svartsengi “ill-conceived and essentially beside the point,” mbl.is reports.

Sæmundsen made the remarks after a presentation about the company’s share offering in Reykjavík yesterday. The offering opened at 10am and runs until Friday, November 13. The company aims to list its shares on the main market of Nasdaq Iceland on November 20.

In November last year, the Ministry of Finance and Economic Affairs said it was considering whether companies that had benefited from protective measures on the Reykjanes Peninsula should cover some of the costs. The Blue Lagoon was among the businesses specifically mentioned.

Sæmundsen said the government had initiated construction of the barriers, primarily to protect energy infrastructure serving a community of about 30,000 people. He said their route was determined by geography, not by the Blue Lagoon’s operations, and that the company had not been involved in the matter. At the time, he added, the government had not said that businesses inside the barriers would be expected to contribute to their cost.

He questioned whether the same reasoning should apply to businesses in Grindavík that had benefited from the barriers, and to businesses elsewhere in Iceland that had benefited from avalanche protection.

Sæmundsen also pointed to a special charge on properties to fund protective measures. Under the law on protecting critical infrastructure on the Reykjanes Peninsula, the charge is 0.08 per mille of a property’s fire insurance valuation. It is collected with insurance premiums, and the revenue goes to the state treasury.

Funding for protection against natural hazards varies across Iceland. Avalanche defences are partly funded through the Avalanche Fund. According to the Icelandic Road and Coastal Administration, the state pays up to seven-eighths of the cost of coastal defences, while municipalities and landowners who benefit pay at least one-eighth.

A National Audit Office review of the Reykjanes Peninsula barriers, published in April, said that funding for natural-hazard defences needed to be addressed through a comprehensive approach and clear budget authorisations. Lava covered part of the Blue Lagoon’s car park during an eruption in November 2024.