There’s nothing unusual about seismic activity in Iceland. In November last year, the inhabitants of one of the country’s key ports were evacuated from their homes as weeks of earthquakes turned out to be magma waiting to hit the surface, threatening the fishing port of Grindavík.
While Grindavík’s 3,700 inhabitants have moved on, the port remains in use and some processing remains – but the volcanic activity is far from over, periodically spewing lava towards power and transport infrastructure, and the tourist hotspot of the Blue Lagoon. The likelihood is this freshly-renewed volcanic activity in Iceland’s southwest region could be around for centuries to come.
There haven’t been only volcanic tremors over the last year or two. Iceland’s volatile politics also came to the boil this year as Prime Minister Katrín Jakobsdóttir stepped down to stand (unsuccessfully) as a candidate during this year’s Presidential election. This triggered a reshuffle within the uneasy government coalition made up of the Independence and Progressive Parties, and the Left Green Alliance, notably with finance minister Bjarni Benediktsson yet again claiming the PM’s job, and there were changes at the Ministry of Food, Fisheries and Agriculture.
Longstanding Minister for Food Svandís Svavarsdóttir returned to her post after illness forced her to take time off, and was shifted sideways to become Minister of Infrastructure, while the reshuffle kept the Ministry of Food in Left-Green hands as Bjarkey Olsen Gunnarsdóttir was installed as her replacement – just as aquaculture and whaling became hot political topics.
Having the ministry responsible for the largely ultra-conservative fisheries and agriculture sectors in the hands of the Left-Green has never been an entirely comfortable fit, not least when it came to inevitable clashes over the highly controversial whaling issue.
Iceland’s only whaling operator has close links to the Independence party, while the Left-Green Alliance’s policy is that this isn’t an activity that should be taking place in the 21st Century. There has been no shortage of friction, and this year the new minister issued a whaling licence to the company – for just one year instead of the expected five, which has pleased nobody as lobbies on both sides of the debate criticised Bjarkey Olsen Gunnarsdóttir’s difficult decision and this triggered an unsuccessful parliamentary motion of no confidence in the minister.
Aquaculture’s rapid growth
Aside from the high-profile but economically tiny whaling issue, the current aquaculture bill was at the centre of a storm.
Iceland’s aquaculture sector failed to take off in the same way as it did in neighbouring countries during the last century, but a rapid increase in the last few years – from barely 3,000 tonnes of salmon produced a decade ago to 43,000 tonnes last year – has been making up for lost time as salmon producers have been actively expanding. It’s no surprise that this has also not been far from controversy, not least with a few highly visible blunders that resulted in salmon escapes and questions in some instances over the welfare of salmon in cages, as regulation and monitoring have not kept pace with the salmon industry’s expansion, much of which is backed by foreign companies looking to set up shop in Iceland’s so far relatively uncrowded fjords.
An initial expectation that new sea cage licences for fjords around the country would be open-ended – essentially giving producers access to sites with no attached time limitation – was immediately unpopular, with comparisons drawn to the quota rights allocated to fishing companies that at the time were also not time-limited, effectively conferring these as de facto property rights.
“The bill represented a significant leap from previous regulations, introducing stricter controls and enhanced safeguards to address environmental and operational concerns. The industry had shown mixed responses: some stakeholders appreciated the move towards sustainability and the long-term benefits, while others were concerned about the immediate impact on operations and compliance costs,” a Ministry representative commented.
“Achieving complete satisfaction from all sides in the debate was a challenging goal. The aquaculture bill aimed to balance environmental sustainability, industry growth and community interests. Key challenges included establishing time-limited licensing to ensure periodic review and adaptation of practices, and persuading the industry to adopt stricter regulations and safeguards. These measures were considered essential for protecting our natural resources, but they also required significant adjustments from the industry. The dialogue with stakeholders was extensive, aiming to find common ground and address concerns. However, the bill met significant resistance from wildlife conservation activists.”
The minister has indicated that it is uncertain if the bill will go through parliament without being further amended, and also that it remains unlikely that the bill on aquaculture would be put before Parliament again during its next session. The likelihood is that it will be the job of a new government to propose changes to current legislation.
Catching sector stability
In contrast to the furore around the aquaculture sector that’s reminiscent of the dissatisfaction with the way fisheries were managed almost a generation ago – which has since become the norm – Iceland’s highly vertically-integrated catching sector enjoys an almost unique level stability, although the dissatisfaction with the inequalities stemming from the quota system hasn’t disappeared. This is an apparently insoluble point of contention that no government over recent decades has been able to address.
There has been a sustained period of investment taking place in the wild catch sector, both in shore-based processing and in fishing companies investing in new tonnage, in both demersal and pelagic sectors. Thorfish has a new fresher trawler on the way from Armón in Spain, which is also building the country’s new marine research vessel, the Skipasýn-designed Thórunn Thórðardóttir. VSV in the Westman Islands is rumoured to be about to place orders, Ísfélagið’s new Sigurbjörg has been delivered and Gunnvör in Ísafjörður has placed an order for a new factory freezer trawler. Gjögur and Skinney-Thinganes both have new pelagic vessels either just delivered from or under construction with their Danish builder in Skagen.
While shipbuilding in Iceland came to an end a few decades ago and any new vessels other than inshore craft are now built overseas, the country’s domestic tech industry is highly active and inventive, with names such as Hampiðjan and Marel dominating particular industry sectors as global players. Alongside these is an environment that fosters and encourages new ventures of all kinds, from ship design to the growing utilisation of co-products, as demonstrated by the growth of the Iceland Ocean Cluster, which is about to expand significantly, as well as having spawned a number of partner clusters in other countries.
Fickle capelin
The now deeply entrenched quota system provides a certain stability. Quotas generally tend to see only moderate fluctuations from year to year, and the pivotal cod quota has been around the same figure for some years – a recommended 213,214 tonnes for 2024-25, 1% up on the previous year, and it’s more than a decade since the cod allocation last dipped below 200,000 tonnes. On the other hand, it’s still a far cry from the half-million-tonne cod fisheries of half a century ago, and the predictions that the quota system would bring these back have by now almost disappeared into folklore.
The advice for haddock and saithe quotas for the coming year is two rollovers of 76,774 tonnes and 66,705 tonnes, while the recommendation for a 14% increase in the golden redfish quota to 46,911 tonnes is welcome, as this had become a choke species in many fishing areas.
On the pelagic side mackerel remains a bone of contention as Norway, the Faroe Islands and the UK made a show of awarding themselves the lion’s share of the TAC, leaving the other coastal states of Iceland, Greenland and the European Union out in the cold, as there’s no doubt that once again the overall mackerel catch will be substantially in excess of the agreed TAC.
This year some of Iceland’s mackerel catch has been caught in its own waters, serving to strengthen its claim to a share of the fishery – not that there appears to be any urgency on the part of the coastal states to come to an agreement on how the TAC should be divided.
“Iceland does not consider the partial agreement by the UK, Norway and the Faroes helpful in reaching a comprehensive agreement. However, Iceland remains committed to engage with all the coastal states and actively seek a comprehensive agreement on mackerel and other shared stocks,” the Ministry of Food Fisheries and Agriculture said in a statement.
Despite the occasional grandstanding and international jockeying for position by all of the coastal states on shared stocks, there’s a stability to the fisheries for mackerel, herring and blue whiting – but the big variable for Iceland is capelin. A strong capelin season can see landings of as much as 1 million tonnes, which represents a healthy boost for fishing companies and producers, suppliers of every kind, coastal communities around the country, and not least in depositing a chunk of revenue into state coffers. But capelin is a fickle fish, and after a few good years, there was a zero TAC for the 2023-24 winter season, and pelagic operators instead focused on blue whiting to keep fishmeal plants supplied.
While there has been significant growth in other areas of the Icelandic economy, with tourism and energy playing major roles, the seafood sector remains the keystone of Iceland’s economy, with seafood exports worth ISK 352 billion in 2023, slightly down on the ISK 361 billion figure for the boom year of 2022, which was buoyed up by an unexpectedly successful capelin season.
