Iceland’s fisheries group urges review of fuel carbon charges

Iceland’s fisheries industry association SFS is urging the government to review charges on oil used by the sector and align them with policies in neighbouring countries, according to an analysis reported by mbl.is.

The carbon tax on gas and diesel is now 28.30 Icelandic krónur per litre, up from 2.90 krónur when it was introduced in 2010. The levy has therefore nearly quadrupled tenfold in nominal terms, SFS says. The fishing industry has paid a cumulative 40 billion krónur since 2010, adjusted for inflation.

SFS says Iceland’s main fishing-industry competitors have either exempted fishing vessels from comparable charges, delayed them or compensated operators. It argues that the available data do not show the tax has had a decisive effect on fuel use, which began declining well before the levy was introduced because of efficiency improvements, effective fisheries management and investment in new vessels and equipment.

No energy source can yet fully replace oil in fishing vessels, the association says. It warns that an uncompensated carbon tax, unlike those imposed by many competitors, weakens the industry’s competitiveness and risks shifting emissions elsewhere without reducing global emissions.

Instead of raising charges, SFS says the government should support a practical energy transition through stronger electricity infrastructure, shore connections and backing for innovation and investment in climate-friendly technology. It says future decisions on the carbon tax should assess feasible responses, climate benefits and effects on competitiveness, including by looking at the Faroe Islands, Greenland, Norway and Denmark.

The association says the government should abandon its path of increasing charges without delay.