Policy landscape

Reykjavík’s latest climate plan, the Climate Action Plan 2021–2025, outlines a pathway to carbon neutrality by 2040, structured around six objectives, including carbon sequestration. While the city recognises that removals are essential for reaching net zero, the primary focus remains on emissions reductions, particularly through decarbonising transport, promoting active mobility, and improving energy efficiency.

CDR is acknowledged in the plan but currently limited to nature-based methods. Though both natural and technological sequestration are mentioned, nearly all concrete measures involve land-based approaches such as wetland restoration, afforestation, and urban greening within the city’s territory. These actions have a modest overall impact, with projected removals reaching approximately 34,000 tonnes of CO₂ annually by 2040. This represents about 5% of the city’s total greenhouse gas emissions in 2019.

The city’s Green Plan complements this framework and adds further policy support. Under its “Green City” pillar, one of five key goals is to increase carbon sequestration and expand green spaces. The main action here is to plant 150 hectares of forest over the next decade, expected to remove up to 1,000 tonnes of CO₂ per year at maturity. These activities are included in the city’s investment strategy, reflecting strong institutional support, even if the overall mitigation effect is relatively limited.

The city also commits to offsetting the carbon footprint of its municipal operations, which amounted to 1,800 tonnes of CO₂ in 2021 and mentions carbon-negative procurement as a guiding principle. However, the strategy lacks clarity on how these goals will be delivered—no budget lines, methodologies, or procurement criteria are specified.

In summary, Reykjavík’s current policy environment creates an early foundation for nature-based CDR, supported by climate and greening strategies. However, engineered removals remain unaddressed at the city level, and removals overall play a limited role in climate planning. To fully align with the city’s 2040 neutrality target, a more detailed and diversified CDR strategy will be needed in future policy cycles.

Governance landscape

Reykjavík’s climate governance is led by the Department of Environment and Planning, which oversees the city’s Climate Action Plan 2021–2025. This department is responsible for climate policy development and coordination across city functions, with a climate team monitoring progress toward Reykjavík’s 2040 carbon neutrality goal.

Operational responsibilities are shared across municipal departments and city-owned enterprises. Notably:

• Orkuveita Reykjavíkur (Reykjavík Energy), 93.5% city-owned, leads emissions reduction in the energy sector. The mineralisation company Carbfix is a subsidiary of Reykjavik Energy.
• Sorpa, a waste management company responsible for waste collection and processing in the Capital Region. It is jointly owned by Reykjavík and neighbouring municipalities.

There is currently no municipal unit explicitly responsible for carbon dioxide removal (CDR). However, the city references land-based and technological sequestration in its climate plan, implying that responsibilities are distributed across planning and energy entities.

The Climate Action Plan was developed through six thematic working groups (e.g. energy, transport, green spaces), showing institutional capacity for cross-departmental coordination. Reykjavík also aligns with Iceland’s national climate goals and participates in the EU Mission on Climate-Neutral and Smart Cities.

Still, CDR risks falling between the cracks, as it is not a designated focus area nor tracked with specific targets.

Gaps and opportunities

• Despite clear commitments to carbon neutrality, Reykjavík has not yet developed an estimate of residual emissions or defined what portion of those emissions will need to be neutralised through CDR. This undermines the strategic role of removals and limits long-term planning for balancing hard-to-abate sectors. Given that GHG emissions were about 630 KtCO₂e in 2019, residual emissions could be estimated to be between 63 and 95 KtCO₂e in 2040 (assuming a 90 or 85% gross emission reduction, respectively).
• CDR is not addressed as a standalone component of the city’s mitigation strategy. While carbon sequestration is mentioned in the Climate Action Plan and Green Plan, the focus remains on offsetting municipal operations rather than broader systemic removals.
• Current measures are almost entirely nature-based, such as afforestation and wetland restoration, with limited projected impact (max. 34,000 tonnes CO₂ per year by 2040). Engineered removals—despite Reykjavík Energy’s leadership in Carbfix—are not embedded in city planning or procurement.
• There is no defined governance framework or budget allocation for CDR. Carbon-negative procurement is mentioned as a principle, but lacks concrete mechanisms, targets, or accountability structures for implementation. Reykjavík will build around 10,000 new apartments in the next decades, which represents an opportunity for carbon negative concrete.

Core recommendations

1

Use the next Climate Action Plan to detail the role of CDR, including a quantified estimation of residual emissions and the role removals will need to play between now and 2040.

 

2

Integrate engineered CDR pathways into existing policy objectives such as “circular thinking” and “green structures”—for example, through mineralisation of construction waste or use of biochar in materials and soils.

 

3

Leverage the city’s stake in Reykjavík Energy (93.5%) and Carbfix’s expertise to explore how CO₂ mineralisation could serve territorial climate goals.

 

4

Allocate a part of the city’s Green Plan investment package (ISK 220 billion between 2020 and 2030) to procure permanent CDR to reduce net emissions between now and 2030.

 

5

Strengthen partnerships with local networks such as Festa (a network of more than 200 Icelandic companies and organisations) to promote CDR awareness and action among businesses and institutions. Revising the Festa climate declaration to include CDR could serve as a trigger for wider domestic engagement.

 

6

Develop clear and robust accounting frameworks for tracking and financing CDR activities. This could be done in collaboration with other cities in Finland and the Nordics.

 

7

Leverage the knowledge gathered by the Röst Center on marine CDR and use Reykjavik’s coastal location to conduct different suitable types of marine CDR.