Country profile - Distinguishing factors (Iceland)

SOER 2010 Country profile (Deprecated)
This page was archived on 21 Mar 2015 with reason: A new version has been published
SOER Country profile from Iceland


Iceland is an island lying between Greenland and Europe astride the Mid Atlantic Ridge. It is relatively isolated, as the shortest distances to the European continent are 970 km to Norway and 798 km to Scotland.

Figure 1 Distances between Iceland and other countries

Figure 1 Distances between Iceland and other countries

Iceland is the second-largest island in Europe and the third largest in the Atlantic Ocean and its northernmost part is just south of the Arctic circle. It covers an area of approximately 103,000 km². The continental shelf up to a depth of 200 m is approximately 115,000 km², and the exclusive economic zone (EEZ) is approximately 758,000 km². This zone also constitutes Iceland’s jurisdiction as regards pollution control. Land area below 200 m is 24 % and more than half the land area lies above 400 m above seas level. A vast part of Iceland is thus unpopulated central highlands. Almost 88 % of the total area is natural and semi- natural: heath lands 35 %, bare rocks 2 %, sparsely vegetated areas 13 % and glaciers just over 10 % (1).


Agricultural areas cover 2.4% of the country: 97 % is classified as pastures, the remainder being very small patches of non-irrigated arable land and land under complex cultivation patterns (1).



The climate of Iceland is maritime with cool summers and mild winters. The temperature decreases and becomes more arctic towards the interior, partly because of an increase in altitude and partly because temperature in winter decreases further from the shore. A large part of precipitation falls when wind is blowing from east to south. Accordingly, the highest precipitation is found in the south-eastern parts, with estimated maximum annual values of more than 4 000 mm on glaciers. In southwest and west Iceland the yearly precipitation is 1 000-1600 mm in the lowlands at the coast, but only 700-1000 mm further inland. The precipitation is lowest in northern and north eastern districts being 400-600 mm in the lowland areas and less than 400 mm north of the glacier Vatnajökull (2).


Sea currents

The main currents are the Irminger, a branch of the Gulf Stream, which has a temperature of 6-8 °C and a flow of 2 million m3/sec, and the East Greenland, originating in the Arctic, with a temperature of 0 °C and a flow of one to two million  m3/sec (Figure 2). On the continental shelf, a coastal current is created by the mixing of the ocean currents with fresh water from the land, that flows clockwise around the country at a rate of about one million m3/sec. Average runoff from Iceland is estimated as 5 300 m3/sec. The magnitude of the coastal current is 180 times greater than the runoff from land.

Figure 2 Sea currents around Iceland. Unbroken lines denote warm currents - broken lines denote cold currents

Figure 2 Sea currents around Iceland. Unbroken lines denote warm currents; broken lines denote cold currents.



Iceland is a volcanic island predominantly formed of basaltic rock of Quaternary and Tertiary Ages. The oldest basalt rocks – up to 15 million years old – are found in west-northwest and east-southeast Iceland. The neo-volcanic area is confined to an axial zone that runs through the country. Postglacial lava flows cover about 10 % of Iceland and the historical flows account for around one sixth of the lava (2). Between 30 and 40 volcanoes have erupted during historical times in Iceland and in recent centuries an eruption has started on average every fifth year. Iceland is very rich in natural heat – thermal areas are divided into two classes on the basis of the maximum subsurface temperature of the thermal water. Low themperature areas have temperatures below 150 °C at 1 000 m depth, while in high-temperature areas the temperature from the surface down to 1000 m is above 200 °C. Earthquakes are frequent in Iceland – ones larger than 6 on the Richter scale struck in the southern lowlands in both 2000 and 2008.



The population of Iceland is 317 630 (1 January, 2010), consequently Iceland is sparsely populated with only approximately 3 inh./km2. Approximately 90 % of the population lives on the coast and less than 1 000 live above 200 m. Icelanders base their economy largely on the utilisation of marine resources industry and tourism. The most densely populated area in Iceland is the southwest corner, with around 70 % of the population living in the Reykjavík region in Faxaflói Bay. A large part of Iceland's industry is also located in this area.


Economic structure

The mainstays of the Icelandic economy rest on the utilisation of renewable natural resources: large and rich fishing grounds, hydro and geothermal power, and pastureland. The importance and potential of human capital is witnessed by the number of computer software and biotechnology companies.

Fisheries: Traditionally, fisheries form the largest basis of the nation's economy, providing over one third of Iceland's income from exports. Most fishing takes place on the continental shelf. The fishing territory, which is Iceland's main natural resource, requires strict management, and fish catches are tightly controlled. The main species caught are cod, haddock, saithe, redfish, herring and capelin.


Iceland has abundant energy sources in the form of geothermal energy and hydropower. Energy consumption per person is among the highest in the world. About 90 % of all houses are heated with geothermal energy; the remainder being heated mainly by electricity. Eighty per cent of the country's electricity is generated using hydropower; the remainder being geothermally generated.

Heavy industries: The first aluminium plant was built in Iceland in the late 1960s. In the 1970s, the build-up of large industries continued with the construction of of a ferro-silicon plant, and since 1995 there has been a number of new large-scale industrial expansions and projects. The total production capacity of aluminium smelters has increased from 270 000 tonnes per year (tpy) in 2005 to 780 000 tpy in 2008. The power intensive industries consumed about 77 % of electricity produced in 2008 (3). The long-term impact of these investments increased the share of aluminium in total merchandise exports from 20 % in 2005 to roughly 45 % in 2009 (3).


Cultivation is almost exclusively confined to the lowland areas although most of Iceland's land area consists of highlands. Only about 1 500 km2 of this land has been cultivated, mainly as hayfields. Farmers have mostly concentrated on the cultivation of grass, as the land is well suited to this. Conditions for grain growing are difficult due to the cool climate. However, hardy, fast-growing barley types do grow well and are increasingly planted.


The share of tourism in Iceland´s total export revenue was 16.9 % in 2008. Foreign visitors numbered about 300 000 in 2000 and around 500 000 in 2008 and 2009 (4). The forecast of the UN World Tourism Organization (UNWTO) suggests that Iceland can expect 760 000 visitors in 2020 (5).


(1) Corine Land Classification in Iceland 2000-2006. Report in Icelandic.

(2) ICELAND. The Republic. Handbook published by the Central Bank of Iceland. Ed´s: Jóhannes Nordal og Valdimar Kristinsson. Reykjavík 1996.

(3) Economy of Iceland. Report in English.

(4) Tourism in Iceland, feb 2010. Report in English.

(5) Tourism in Iceland, oct 2010. Report in English.

(5) Tourism in Iceland, oct 2010. Report in English.

There are currently no items in this folder.



Filed under:
Filed under: SOER2010
Document Actions