We aim to reach carbon neutrality in 2025

We will become carbon neutral in 2025. This means that our carbon sequestration measures must fully offset our emissions, but decarbonisation isn´t enough. We have the adaptive capacity to achieve carbon negativity and achieving this will be our contribution to the fight against climate change.

We have prepared an action plan to achieve our objectives, based on comprehensive data on the Company’s carbon footprint. The plan outlines the strategy needed to accomplish these goals. We have strategically prioritised the most efficient way to achieve carbon neutrality and in what order:

1. Prevent new emissions
2. Reduce current emissions
3. Implement mitigation measures

Emissions that we prevent, won't need to be reduced in the future and reducing our current emissions means that we won't need to mitigate them in the future.

Internal carbon prices are a main factor in our decision making process. This means that emissions - or rather future emissions costs - are calculated as part of major financial decision, ranging from the purchase of supplies to the selection of new power projects.

Our internal carbon price is based on extensive analyses and data collection. This sets a price target for calculated emissions, per tonne of carbon dioxide (CO2) and equivalents, in the Company's operations. The cost of emissions is therefore accessible to anyone making decisions within the Company. Internal carbon prices create incentives to make financial and operational decisions, based on low-carbon solutions. The internal carbon price has already been introduced and implemented.

Our internal carbon prices for 2022 are 79 $/tonnes CO2.

How is this calculated? Internal carbon prices reflect the financial cost of becoming carbon neutral.

The prevention of new emissions is not only important, but also practical because it represents the most sensible use of our time and available resources. Preventing new emissions could minimise the need to decrease or sequester emissions. The most effective prevention method is to ensure that future decisions on operational matters or construction projects are based on low-carbon solutions.

Informed decisions on the procurement of products and services can be made by using every available opportunity to choose suppliers who monitor the carbon footprint of their products and services. We will therefore focus on purchasing environmentally certified products and services.

We will encourage our contractors to comply with the same principles and requirements we have set for ourselves. These include the choice of machinery and minimising fossil fuel consumption.

We will focus on minimising our carbon footprint during the design and construction phases of our power projects by:

• Improving the design and implementation of our projects to prevent emissions, therefore reducing the carbon footprint
• Ensuring that the carbon footprint assessment of new projects and maintenance projects is included e.g. we made the decision to reduce the amount of concrete and cement (used in concrete) as a result of the ‘Life Cycle Analysis’ which showed that reducing concrete is one of the largest single factors in reducing the carbon footprint of new hydropower stations.
• Considering the location of reservoirs and geothermal utilisation sites based on the potential emissions intensity. A large percentage of our operational emissions can be traced back to these two sources.
• Ensuring that construction and construction sites are organised in such a manner that fossil fuel consumption is kept to a minimum. Examples of this include the choice of drills, machinery, material extraction sites and efficient transportation to and from the site.
• Choosing suppliers who monitor the carbon footprint of their products and services.
• Providing education on carbon-prevention for project managers and consultants.

We have collected data on operational greenhouse gas emissions for over a decade, as part of a much larger ongoing research project on the overall environmental impact of our operations. The data enables us to identify the most efficient solutions to lowering emissions. We are already actively working towards achieving these emission targets.

Geothermal utilisation

We will focus on substantially reducing emissions from Þeistareykir Geothermal Power Station. We will achieve this by cleaning the carbon dioxide emitted from geothermal gas. Carbon dioxide will be reinjected back into the geothermal system or utilised to create other revenue sources. Emissions from our geothermal stations will be 60% lower in 2025 than they were in 2008, despite the recent introduction of the new Þeistareykir Geothermal Power Station.

The green transformation of our vehicles and machinery is already underway. Over 22% of our vehicles use electricity or other renewable energy sources as their only fuel source. An additional 8% of our fleet are plug-in hybrid electricity cars. We are systematically working towards reducing fossil fuel consumption in our heavy machinery fleet. We are committed to eliminating the use of fossil fuels in this category by 2030.

The next step will be the reduction of fossil fuel consumption in equipment used to power specific processes in our power production, where we can’t use electricity. We will also identify technical solutions for energy exchange in our back-up generators.

We will reduce the number of employee flights wherever possible and will encourage our employees to choose eco-friendly travel options to and from work. Flight emissions will be 30% less in 2030 than they were in 2018 and employee travel emissions (to and from work) will have decreased by 60%. Employee travel represents only a small percentage of our entire carbon footprint but we believe that our contribution counts. We must take part in this important societal shift by taking the initiative and playing an active part in the green transformation of transport in Iceland.