New Strategy on E-fuels and Climate-Related Business Development
Landsvirkjun aims to supply electricity to projects that maximize value creation for both the company and Iceland. It is equally important that these projects contribute to reducing greenhouse gas emissions. Direct electrification in mobility and industry represents a key energy transition pathway that aligns well with these objectives. We therefore consider it important to support and participate in projects in this field.
We do not anticipate hydrogen and e-fuels playing a major role in Iceland’s domestic energy transition in the near future, although this could change over the next decade or later. The cost of green hydrogen and e-fuels remains high compared to fossil fuels or to alternative energy transition options, such as direct electrification or bioenergy. Furthermore, the emergence of a business environment to close this gap is subject to considerable uncertainty. Demand remains limited under such conditions. We will therefore closely monitor the development of costs, the business environment and demand for green hydrogen and e-fuels.
In the coming years, Landsvirkjun will explore opportunities to participate in and supply electricity to smaller-scale hydrogen projects. In the longer term, we will also assess opportunities for electricity sales to larger e-fuel projects, but do currently not consider such projects competitive without substantial public funding.
We will furthermore continue to investigate opportunities for electricity sales or direct involvement in the development of other climate-related and energy transition projects, such as biogas, waste-to-energy, and carbon capture. These initiatives may be developed in partnership with other stakeholders, where appropriate.
The strategy was approved by Landsvirkjun’s Board of Directors, following a proposal by the CEO. It supports the company’s vision of a sustainable world powered by renewable energy.
