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Case study: accelerating Iceland’s circular economy with green industrial parks

Updated: Feb 5

Iconic Kirkjufell mountain in Iceland with cascading waterfalls in the foreground, showcasing the country's dramatic natural landscape. The green mountain rises distinctively against cloudy skies, with flowing water representing Iceland's renewable energy resources.
Photo: Photo by Koushik Chowdavarapu

Executive summary


In collaboration with the Ministry of Industries, Promote Iceland, the National Power Company of Iceland (Landsvirkjun), the Municipality of Nordurþing, and other advisors, Bjarni Herrera, former CEO, Co-Founder, and Senior Advisor at CIRCULAR Solutions, and then Head of Sustainability at KPMG Iceland led on its behalf Iceland’s first mapping of green industrial parks and its circular economy impact.


This initiative was a blueprint for fostering circular economy principles in Iceland and establishing pioneering green industrial parks at Bakki, Helguvík, and Grundartangi. These parks now embody Iceland’s ambitions to optimise resource utilisation, reduce emissions, and boost local economic resilience.


Identifying the need for circular economy innovation


Iceland’s untapped potential for circular economy innovation motivated the Ministry of Industries to launch a comprehensive study in 2021. The aim was to identify and develop green industrial parks that maximise resource efficiency and sustainability. An in-depth analysis of ownership models, financing mechanisms, and actionable frameworks for implementation was conducted.


Drawing inspiration from global best practices, the project laid the foundation for integrating industrial symbiosis into Iceland’s regional and national development strategies.


"Through these projects, we strengthen Iceland’s competitive position relative to neighbouring countries and fully align our priorities and strategies in innovation, energy, and, of course, sustainability."—Þórdís Kolbrún Reykfjörð Gylfadóttir, Minister of Tourism, Industry, and Innovation.

Overcoming barriers to implementation


The project faced significant obstacles:


  • Geographical and economic constraints: Iceland’s remote location and reliance on imports complicated logistics and investment strategies.

  • Stakeholder alignment: Harmonising objectives across municipalities, government agencies, and private investors required intensive dialogue and coordination.

  • Regulatory gaps: Adapting international green industrial park standards to Iceland’s unique legal and environmental context posed challenges.


Phased and collaborative development


The project employed a phased and collaborative approach:


  1. Comprehensive mapping: Conducted a detailed analysis of Iceland’s energy and material streams, focusing on geothermal byproducts and industrial waste.

  2. Innovative ownership models: Explored Public-Private Partnerships (PPPs) as a viable long-term development and scalability pathway.

  3. Stakeholder engagement: Facilitated workshops with municipalities, industrial operators, and government agencies to ensure alignment with Iceland’s sustainability goals.

  4. Localised recommendations: Proposed actionable frameworks tailored to regions such as Bakki, leveraging geothermal energy, and Grundartangi, focusing on industrial symbiosis.


Establishing Iceland’s circular economy with green industrial parks


Since the publication of the report, several green industrial parks have been established, achieving notable milestones:


  • Bakki: Transformed into a hub for geothermal energy utilisation and resource symbiosis.

  • Helguvík: Focused on marine-based industrial innovation, including fully utilising fishing byproducts.

  • Grundartangi: Leveraged waste heat and byproducts from aluminium smelters to support adjacent industries.


These initiatives have collectively reduced emissions, minimised waste, and strengthened Iceland’s position as a leader in sustainable industrial practices. Moreover, they have attracted significant foreign and domestic investments.


Uniting forces for sustainability


On his initiative, Bjarni collaborated extensively with key domestic and foreign stakeholders who had extensive experience designing and operating green industrial parks in countries such as Denmark and Germany. 


Þórdís Kolbrún Reykfjörð Gylfadóttir, Minister of Tourism, Industry and Innovation, pictured with Kristján Þór Magnússon, Municipal Manager of Norðurþing, Pétur Óskarsson, Managing Director of Íslandsstofa, and Ríkarður Ríkarðsson, Executive Director of Business Development and Innovation at Landsvirkjun, at the signing of collaboration agreements for the Green Carpet and Green Industrial Parks initiatives aimed at strengthening green investment in Iceland.
Photo: Icelandic Government

Scaling impact and driving innovation


Iceland’s green industrial parks' success underscores this model's scalability. Future opportunities include:


  • Expanding industrial symbiosis networks: Connecting existing parks to form a cohesive national system.

  • Enhancing policy frameworks: Developing incentives for green investments and streamlining regulatory processes.

  • Exporting expertise: Positioning Iceland as a global leader in circular economy solutions through knowledge sharing and consultancy.


 

Establishing green industrial parks has accelerated Iceland’s journey toward a circular economy, showcasing the power of strategic collaboration and innovative thinking. With extensive experience in pioneering initiatives, creating roadmaps, and thinking outside the box, Accrona brings unparalleled value by applying insights from one region to another and financing the circular economy and green industrial park activities. Contact Accrona to explore how we can empower your sustainability vision.

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