The Energy Fund will continue to subsidize the purchase of electric cars in the same way as it was done in 2024. The amounts are unchanged and buyers can apply for a subsidy at Island.is

Subisdies are available for vehicles in the class of passenger cars (M1) and vans (N1) that are under ISK 10 m. at purchase price:

New vehicles in category M1 with a purchase value of less than ISK 10 million. are eligible for funding in the amount of ISK 900,000.

New vehicles in category N1 with a purchase value of less than ISK 10 million. are eligible for funding in the amount of ISK 500,000.

Electric car subsidies — National Energy Authority

Unchanged subsidies for electric car purchases

The Icelandic Energy Authority was closed on 31 December 2024.
On 1 January 2025, the Icelandic Environment and Energy Agency began operations.

The Environment and Energy Agency began operations at the turn of the year.

The Energy Authority was closed down on 31 December 2024.

On 1 January 2025, the Environment and Energy Authority began operations. 

Some service disruptions can be expected in the first few days of the new year.

A website for the new institution is under construction under uos.is. In the meantime, the websites of the Energy Authority and the Environment Agenv will be accessible. 

Projects of the Environment and Energy Agency:

The Environment and Energy Agency will take over the operations of the Energy Authority and part of the operations of the Environment Agency. The new institution will be responsible for the administration of climate, environmental and energy issues and issues related to resource utilization. 

These include projects in a variety of areas: 

The Icelandic Environment and Energy Agency has started operations

At the end of September 2024, a final conference for the EEA Grants Environment, Energy and Climate Programme was held in Warsaw, Poland, which is part of the operation of the EEA Agreement. The National Energy Authority is the coordinator on behalf of the Ministry for Foreign Affairs and Iceland with the plan. The programme was led by the Polish Ministry of Climate and Environment in cooperation with the National Fund for Environmental Protection and Water Management (NFOŚiGW) in Poland, the National Energy Authority of Iceland, and the Water and Energy Agency of Norway and the Environment Agency of Norway. 

The programme covers the period 2014 – 2021, (completion of construction until April 2025) and is the largest programme within the EEA Grants Fund, around EUR 140 million, but in addition Poland also provided 15% additional funding. The project parties in question also contributed their own funding, so that the scope of the projects was greater. The conference brought together representatives of the above-mentioned partners of the programme, and from the Structural Fund Secretariat in Brussels, as well as representatives of the programme from other EU countries, Polish NGOs, project beneficiaries, etc. 

The programme is one of the largest projects in the field of green energy transition and climate issues in which Iceland participates, as the plan is expected to reduce carbon dioxide emissions, CO2, by 600,000 tons annually, while in comparison, Iceland is expected to reduce carbon dioxide emissions by 120,000 tons annually.  This clearly demonstrates the success of Iceland's participation in cooperation with other European nations in achieving success in the field of green energy transition and climate issues abroad, through professional projects and targeted cooperation within the EEA, which benefits everyone, as emissions are independent of borders.

The focus of the plan was mainly on 4 main areas: 

Improved energy efficiency in buildings, industry and municipalities 

Strengthen the opportunities of municipalities to reduce greenhouse gas emissions and adapt to changed conditions due to climate issues,

At the conference, great satisfaction was expressed with the results of the plan despite the challenges during the period, such as from Covid and the energy crisis that can be traced to the war in Ukraine, which had a major impact on prices, project time and inputs for individual projects, etc.  A representative of the Polish government thanked all those involved in the programme from the National Energy Authority of Iceland, the Water and Energy Authority of Norway and the Environment Agency of Norway, the Structural Fund Office in Brussels, as well as to parties in Poland from the National Fund and from the Ministry of the Environment and Climate. Friðrik Jónsson, Iceland's ambassador to Poland, also gave a speech.

The plan is then divided into 12 smaller sub-categories, which were put out to tender in the market: 

1. Investments in blue-green infrastructure, 
2. Raising awareness in schools about climate change, 
3. Planning of ecosystems in terms of species and habitats, 
4. Ecosystems and NGOs, 5. Prevention of invasive alien species, 
6. Circular economy, 
7. Energy efficiency in buildings, 
8. Sharing of energy systems for heating and energy production,  
9. Modernization of municipal district heating utilities, 
10. Geothermal energy, 
11. Production of wood pellets
12. Small hydroelectric power plants.  

Piotr Bogusz, Deputy Director General of the Department of European Funds, opened the conference, on behalf of Krzysztof Bolesta, Permanent Secretary at the Ministry of Climate and Environment. He expressed satisfaction with the results of the projects and hoped that the good results would encourage participants to continue their efforts in climate adaptation, environmental protection, ecosystem protection, green energy transition and improved energy efficiency.

Norway's Ambassador to Poland, Øystein Bø, emphasized and thanked the successful cooperation of all parties involved in recent years from Poland, Norway and Iceland, as the National Energy Authority has participated in the programme on behalf of Iceland.

Friðrik Jónsson, Iceland's ambassador to Poland, also expressed his satisfaction with the successful cooperation. Iceland's priority continues to be energy security and geothermal energy, which aims to protect the climate and promote green energy development through this initiative. Kjetil Lund, Director General of the Norwegian Water Resources and Energy Agency (NVE), emphasized that further climate adaptation will be a challenge in the future.  He emphasized the results of the project, such as improved energy efficiency, reduced CO2 emissions, lower energy bills and noise reduction.

Increased energy security and environmentally friendly energy sources

One of the main objectives of the EEA Grants in the field of renewable energy is to strengthen energy security, reduce greenhouse gas emissions and improve environmental conditions in the countries concerned, e.g. by using renewable energy, e.g. geothermal energy instead of fossil fuels.

The National Energy Authority's participation in the programme has mainly been in the form of assistance in the design and implementation of plans and supervision of the implementation of tenders (calls), e.g. through presentations and instructions to companies, institutions and individuals in Iceland. The National Energy Authority has also participated in bilateral projects and contributed to increased contacts and knowledge building between Iceland and the countries in question, through information sharing, briefings, increased communication, visits by groups from Iceland to these countries and groups from the countries in question to Iceland.

Panel discussion by the Programme Parties from Iceland and Norway

Baldur Pétursson, from the National Energy Authority, Anne Marie Mo Ravik from the Norwegian Environment Agency and Michael Steinfeld from the Norwegian Water and Energy Agency, discussed the impact of the collaborations established during the projects, the material results achieved, the impact on local communities and insights for the future issuance of the grants. The sponsors placed particular emphasis on the fact that the green energy transition, the environmental and climate solutions that had been implemented, could serve as models for larger and more powerful projects in the future. 

They emphasised the partnership that characterised the programme and the importance of scaling up successful projects to benefit wider communities and encourage similar projects elsewhere in Europe.

Baldur mentioned as an example the transfer of knowledge in the field of geothermal energy between Iceland and Poland in  the KeyGeothermal project, which is the largest training project in the field of geothermal energy that has been held in Poland. He also mentioned that over 10 projects are in the works between Iceland and Poland in the field of geothermal energy. He mentioned one of the importance of reducing bureaucracy for the projects at all levels and thus increasing efficiency and utilization.  

Dorota Zawadzka-Stępniak, President of the National Fund for Environmental Protection and Water Management, emphasized the coordination of the Fund with the actions carried out in the plan. She congratulated the Ministry and partners from Iceland and Norway on their excellent and fruitful cooperation.

In the face of dynamic climate change, cities are playing an increasingly important role in the adaptation process. By 2050, it is estimated that 68% of the world's population will live in cities, making them particularly vulnerable to extreme weather events, while also giving them the potential to lead the green transition.

Urban areas offer the space to implement innovative solutions in sustainable development, improved air quality, water resource conservation, and the use of renewable energy sources.

At the meeting, it was noted that the support of the plan enabled the implementation of numerous projects that have improved the quality of life of residents and shaped cities into more climate-resilient and sustainable places. Participants in the projects showed how these projects had contributed to the green transformation of cities and the green energy transition, through improved quality of life.  

See more news from the Polish Ministry of Environment and Climate and the Embassy of Iceland in Poland. 

Good results from the EEA Grants Programme for the Environment, Energy and Climate in Poland                                         

Sigurður Ingi Friðleifsson, Director of Energy Transition at the National Energy Authority (Orkustofnun), began his presentation by discussing the importance of Orkustofnun following government policies and international commitments in its work to reduce oil consumption.

Sigurður Ingi Friðleifsson, Director of Energy Transition at the National Energy Authority (Orkustofnun), began his presentation by discussing the importance of Orkustofnun following government policies and international commitments in its work to reduce oil consumption. He emphasized that Orkustofnun is a neutral entity that provides reliable and independent information to governments, companies, and the public.

Sigurður reviewed the significant work that has been done in assessing the status of the oil market, analyzing oil consumption, and the impact of energy transitions on oil use in road transport. He stated that a major step had been taken with the publication of real-time data on oil consumption, which allows people to make informed decisions. He also described how oil data is used to measure the success of climate initiatives, noting that Orkustofnun has one oil data specialist who has been doing tremendous work.

Sigurður also discussed the development of electric vehicles in Iceland and how it has evolved since 2012. He highlighted that electric cars are now both cheaper and more economical than before. The price of battery units has dropped by 75% since 2012, making electric vehicles much more accessible to the public and businesses. He noted that in the coming years, it would be essential for the government and businesses to lead by example by transitioning their fleets to electric vehicles.

Sigurður explained that the energy transition in road transport has resulted in a 40% reduction in oil consumption per vehicle. This is a significant achievement in the fight against climate change, he said, and while total oil consumption has increased with the growing number of vehicles, the situation is still better than it would have been without these measures.

Sigurður concluded his presentation by discussing future projects, including plans for all government-owned companies to switch to electric vehicles by 2030. He specifically mentioned an incentive program that has been introduced to encourage the transition to electric fleets within institutions. He also announced the presentation of awards to institutions that have made significant progress in energy transitions.

You can view Sigurður Ingi's presentation slides here.

The recording of the meeting is available here.

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