Revision of Iceland’s 2030 Nationally Determined Contribution

1. Energy Aviation: Emissions from civil aviation are included only in respect of CO2 emissions from flights subject to effective carbon pricing through the EU ETS. These comprise flights within the European Economic Area, departing flights to Switzerland and departing flights to the United Kingdom. International navigation: Emissions from international navigation are included only in respect of CO2 emissions subject to effective carbon pricing through the EU ETS. Other energy source categories in accordance with IPCC guidelines.

2. Industrial processes and product use

3. Agriculture Sectors, gases, categories and pools covered by the

4. Waste nationally determined contribution, including, as 3b 5. Land Use, Land Use Change and Forestry (LULUCF) applicable, consistent with Intergovernmental Panel on Climate Change (IPCC) guidelines; Gases covered: Gases covered: Carbon Dioxide (CO2) Methane (CH4) Nitrous Oxide (N2O) Hydrofluorocarbons (HFCs) Perfluorocarbons (PFCs) Sulphur hexafluoride (SF6) Nitrogen trifluoride (NF3) Further information will be given in accordance with the IPCC guidelines and the relevant UNFCCC Decisions in the Biennial Transparency Reports and the National Inventory Report. Since Iceland’s NDC is economy-wide with all sectors covered, it complies with this provision. How the Party has taken into consideration 3c Iceland's national inventory document (NID) describes the sources considered insignificant and paragraph 31(c) and (d) of decision 1/CP.21; reported as not estimated. The NID provides justifications for exclusion. Mitigation co-benefits resulting from Parties’ adaptation actions and/or economic diversification plans, including description of 3d Not applicable. specific projects, measures and initiatives of Parties’ adaptation actions and/or economic diversification plans. 4 Planning processes: The NDC target of reducing emissions by at least 41 per cent in 2030 compared to 2005 is a revision to Iceland’s 2030 NDC submitted in 2021. The reason for the revision is to clarify how Iceland's quantified target and its overall (national) target fit within the framework of Iceland, Norway and EU's cooperation on emission reductions until 2030. • In October 2019 the EU, Iceland and Norway formally agreed to cooperate on climate action, with the incorporation of the Effort Sharing Regulation (ESR) and the LULUCF Regulation to the Protocol 31 of the EEA Agreement. The ESR and the LULUCF Regulation were set to implement the EU‘s overall target of 40 percent emission reduction by 2030 relative to 1990. Information on the planning processes that the • Iceland announced in December 2020 at the Climate Ambition Summit that it would increase Party undertook to prepare its nationally its level of ambition to reflect the EU‘s updated target, which was increased from 40 per cent 4a determined contribution and, if available, on the emissions cuts by 2030 relative to 1990 to 55 per cent or more, acting in cooperation with the EU Party’s implementation plans, including, as and Norway to achieve this enhanced target. appropriate; • Cabinet approval in December 2020. • The Parliament´s Standing Committee for Environment and Communication was consulted in the planning process before the announcement in December 2020. • Following a review of Iceland’s NDC in 2024 and 2025, it was decided in 2025 to revise the NDC to clarify how Iceland's quantified target and its overall target fit within the framework of Iceland, Norway and EU's cooperation on emission reductions. This revision does not reflect a change in ambition, but seeks to explain more precisely the nature of the ongoing cooperation – which has not changed in its nature nor ambition since the submission of the updated NDC 2021. Domestic institutional arrangements, public Institutional arrangements: participation and engagement with local 4ai communities and Indigenous Peoples, in a gender- The administration framework regarding climate issues is set through Climate Act No 70/2012 responsive manner; for emissions covered by the ESR and the LULUCF regulation, and through ETS Act No 96/2023. The Climate Act prescribes clear directions on arrangements for the work on the Climate Action Plan and how it should be updated and reviewed. Moreover, it has provisions on the advisory role of Iceland’s Climate Council. It also provides a framework on adaptation to climate change, as well as guidelines regarding the scientific reporting on the impact of climate change on Iceland. According to the Climate Act, the Climate Action Plan is to be reviewed at least every four years, taking into account international commitments and the stated objectives of the government. The Climate Action Plan was last reviewed in 2024, with a 2025-2026 implementation plan approved by cabinet in September 2025. The work on the Climate Action Plan was carried out by a standing inter-ministerial climate change committee, with the Association of Local Authorities also represented, led by the Ministry for the Environment, Energy and Climate. Regulation 786/2024 on the inter-ministerial climate change committee further defines the arrangement for the work on the Climate Action Plan and Iceland’s National Adaptation Plan. Regulation 334/2024 on Iceland’s Climate Council further defines its governance and role as an advisory body to the development and implementation of climate policy in Iceland. The ETS Act transposes all the requirements of the EU ETS legislative framework, as incorporated into the EEA Agreement, into Icelandic law. The Ministry of Environment, Energy and Climate has the overarching cross-sectoral responsibility for coordination and implementation. The Ministry of Finance is responsible for the tax schemes and the other ministries are responsible for policies in their respective sectors. Further details on institutional arrangements are found in Iceland's National Communication to the UNFCCC and will be updated in Iceland's Biennial Transparency Reports under the Enhanced Transparency Framework of the Paris Agreement. In accordance with the Climate Act No 70/2012, stakeholders are to be consulted in the preparation of the Climate Action Plan. An inter- ministerial working-group, responsible for developing proposals for actions and overseeing their implementation, was appointed by the minister for the environment, energy and climate. Additionally, the Association of Local Authorities in Iceland nominates one representative. The working-group are to submit an annual report to the minister on the progress of the action plan. In 2011, Iceland ratified the UNECE Convention on Access to Information, Public Participation in Decision-Making and Access to Justice in Environmental Matters (the Aarhus Convention), which links human rights and environmental rights. Iceland supported the adoption of the United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP). Contextual matters, including, inter alia, as 4aii appropriate: National circumstances, such as geography, Information on national circumstances can be found in Iceland's Biennial Transparency Report 4aiia climate, economy, sustainable development and (BTR) and National Inventory Document (NID). poverty eradication; Best practices and experience related to the Iceland’s Climate Council has the role of providing oversight and advice to the government on 4aiib preparation of the nationally determined strategic decisions and Iceland’s climate-related goals. contribution; Integration of just transition and gender equality is fundamental. The Constitution states that all shall be equal before that law and enjoy human rights without regard to sex, religion, opinion, national origin, race, colour, financial status, parentage and Other contextual aspirations and priorities 4aiic other status. acknowledged when joining the Paris Agreement; Men and women shall have equal rights in every respect. Act on equal gender right and gender equality No 150/2020 is to prevent gender discrimination and to create and maintain equal rights and opportunities for all genders in all aspects of the community. Specific information applicable to Parties, including regional economic integration organizations and their member States, that have reached an agreement to act jointly under Article 4b Not applicable. 4, paragraph 2, of the Paris Agreement, including the Parties that agreed to act jointly and the terms of the agreement, in accordance with Article 4, paragraphs 16–18, of the Paris Agreement; How the Party’s preparation of its nationally determined contribution has been informed by the 4c Not applicable. outcomes of the global stocktake, in accordance with Article 4, paragraph 9, of the Paris Agreement; Each Party with a nationally determined 4d contribution under Article 4 of the Paris Agreement Not applicable. that consists of adaptation action and/or economic diversification plans resulting in mitigation co-benefits consistent with Article 4, paragraph 7, of the Paris Agreement to submit information on: i. How the economic and social consequences of response measures have been considered in developing the nationally determined contribution; ii. Specific projects, measures and activities to be implemented to contribute to mitigation co-benefits, including information on adaptation plans that also yield mitigation co-benefits, which may cover, but are not limited to, key sectors, such as energy, resources, water resources, coastal resources, human settlements and urban planning, agriculture and forestry; and economic diversification actions, which may cover, but are not limited to, sectors such as manufacturing and industry, energy and mining, transport and communication, construction, tourism, real estate, agriculture and fisheries. Assumptions and methodological approaches, including those for 5 estimating and accounting for anthropogenic GHG emissions and, as appropriate, removals: Assumptions and methodological approaches are in accordance with methodologies and common metrics assessed by the IPCC (see 5 (d), below). Assumptions and methodological approaches used for accounting for anthropogenic GHG emissions Final accounting towards the target at the end of NDC implementation period may depend on and removals corresponding to the Party’s 5a further arrangements in Iceland's cooperation with the EU and Norway. Any use of nationally determined contribution, consistent internationally transferred mitigation outcomes will be included in Iceland's accounting, with decision 1/CP.21, paragraph 31, and consistent with the approach used by the EU and Norway and accounted for in a way that accounting guidance adopted by the CMA; avoids double counting. This approach is yet to be fully defined and agreed upon by all involved parties. Assumptions and methodological approaches used 5b Not applicable. for accounting for the implementation of policies and measures or strategies in the nationally determined contribution; If applicable, information on how the Party will take into account Iceland's current greenhouse gas inventory is in accordance with Decision 18/CMA.1 and hence existing methods and guidance under the the IPCC 2006 Guidelines, the 2013 Revised Supplementary Methods and Good Practice 5c Convention to account for anthropogenic Guidance Arising from the Kyoto Protocol (IPCC 2013 KP Supplement), the 2013 Supplement to emissions and removals, in accordance with Article the 2006 IPCC Guidelines for the National Greenhouse Gas Inventories: Wetlands (IPCC 2013 4, paragraph 14, of the Paris Agreement, as Wetlands Supplement) and the 2019 Refinements to the 2006 IPCC Guidelines. appropriate; IPCC 2006 guidelines, IPCC 2013 KP Supplement, the IPCC 2013 Wetlands Supplement and the IPCC methodologies and metrics used for 2019 Refinements to the 2006 IPCC Guidelines are used for estimating greenhouse gas 5d estimating anthropogenic GHG emissions and emissions and removals. Global warming potentials (GWP) for a 100-year time horizon from the removals; IPCCs fifth Assessment Report are used to calculate CO2 equivalents. Information in Section 5(e)(i-iii) and 5(f)(i) refers to the legal framework in force at the time of Sector-, category- or activity-specific assumptions, this submission. Iceland´s LULUCF policy framework builds on IPCC guidance, TACCC principles methodologies and approaches consistent with 5e and existing accounting rules, updating and improving them for the period from 2021 to 2030. IPCC guidance, as appropriate, including, as The framework identifies net accounted emissions and removals, contributing to the aim of applicable: enhancing Iceland´s net land sinks in the long-term. Approach to addressing emissions and subsequent Approach to addressing emissions and removals from natural disturbances on afforested land 5ei removals from natural disturbances on managed and managed forest land is according to Art 10 and Annex VI of Regulation (EU) 2018/841. lands; Iceland has not decided if emissions resulting from natural disturbances will be excluded. Approach used to account for emissions and Production Approach is used to account for emissions and removals from harvested wood 5eii removals from harvested wood products; products, as defined in IPCC Guidelines; see also Art 9 and Annex V of Regulation (EU) 2018/841. Within the context of Iceland’s climate cooperation with the European Union and Norway, emissions and removals in managed forests in the period 2021-2030 will be accounted for as the deviation from a projected forward-looking forest reference level, with regards to dynamic age-related forest characteristics, as in accordance with Art 8 and Annex IV of Regulation (EU) Approach used to address the effects of age-class 5eiii 2018/841. structure in forests; Projected reference levels for Managed Forest Land (Forest Land remaining Forest Land) take into consideration age-class structure of forest so that changes in management practices are accounted; see also Art 8 and Annex IV of Regulation (EU) 2018/841. The approach is described in Iceland’s national inventory document (NID). Other assumptions and methodological 5f approaches used for understanding the nationally N/A determined contribution and, if applicable, estimating corresponding emissions and removals, including: Under the revised Effort Sharing Regulation (ESR), the EU legislation sets enhanced binding national reduction targets for greenhouse gas emissions not covered by the existing EU ETS, namely domestic transport (except aviation), buildings, agriculture, waste and small industries. The emissions reduction target for Iceland of 41% in 2030 compared to 2005 is in line with the individual targets of the EU member states. The ESR emissions in the year 2005 are fixed to the value of 3109.329 kt CO2eq. as per the decision of the EEA joint committee No 29/2022. Emissions under the scope of the EU Emission Trading System (ETS) concerns industrial plants, commercial aviation and navigation within the European Economic Area. As the EU ETS operates across borders to reduce emissions collectively, emissions from operators registered in Iceland are not included in the national reference indicator. However, by participating in the system, Iceland continues to contribute to overall emission reductions within the ETS framework. Iceland participates in the EU regulatory framework for Land Use, Land-Use Change and Forestry (LULUCF). Within the climate cooperation with the European Union and Norway, emissions and removals from the land sector will be accounted for based on specific accounting rules for the different land categories in regulation (EU) 2018/841, Art 6-8 and Annex How the reference indicators, baseline(s) and/or IV. Due to the specific characteristics of the LULUCF sector, no separate indicator is provided for reference level(s), including, where applicable, it. sector-, category- or activity-specific reference 5fi levels, are constructed, including, for example, key For the period 2021-2025, following accounting rules are used: parameters, assumptions, definitions, • Accounting for emissions and removals from LULUCF follows specific rules depending on the methodologies, data sources and models used; land accounting category in accordance with Regulation (EU) 2018/841. • Afforested Land and Deforested Land use baseline zero (gross-net accounting). Managed Grassland, Managed Cropland and Managed Wetland use as baseline the average emissions between 2005 and 2009 (net-net accounting). • Managed Forest Land uses as baseline a Forest Reference Level based on continuation of Forest Management Practices between 2000 and 2009 and taking into account the age-class structure of forests, projected through the compliance period. The mere presence of carbon stocks is excluded from accounting. LULUCF Categories: Emissions and removals occurring on reported categories of forest land, cropland, grassland, and wetland, including land use change between these categories, and between these categories and settlements and other land. LULUCF Pools: Above-ground biomass; Below-ground biomass; Litter; Dead wood; Soil organic carbon; Harvested wood products. Accounting rules and targets for the period 2026-2030 are pending uptake of the updated regulation into the EEA Agreement and the LULUCF target for Iceland is still not known. Therefore, a quantified target for LULUCF emissions is not set in this NDC and respective emissions are not included in the national reference indicator. For Parties with nationally determined contributions that contain non-greenhouse-gas 5fii components, information on assumptions and Not applicable. methodological approaches used in relation to those components, as applicable; For climate forcers included in nationally determined contributions not covered by IPCC 5fiii Not applicable. guidelines, information on how the climate forcers are estimated; 5fiv Further technical information, as necessary; Not applicable. Iceland seeks to fulfil the NDC through the climate cooperation with the European Union and Norway. Final accounting towards the target at the end of NDC implementation period may depend on further arrangements in Iceland's cooperation with the EU and Norway. Any use of internationally transferred mitigation outcomes will be included in Iceland's accounting, consistent with the approach used by the EU and Norway and accounted for in a way that The intention to use voluntary cooperation under 5g avoids double counting. This approach is yet to be fully defined and agreed upon by all Article 6 of the Paris Agreement, if applicable. involved parties. A decision on the use of voluntary cooperation under Article 6 of the Partis Agreement is pending. How the Party considers that its nationally 6 determined contribution is fair and ambitious in the light of its national circumstances: Iceland’s projected emission reduction in 2030, at the time of this revision estimates a reduction of -28% compared to 2005 in sectors pertaining to its quantified target. Yet, Iceland How the Party considers that its nationally aims for reducing emissions by 41% in respective sectors compared to 2005. These projections 6a determined contribution is fair and ambitious in already build on and take into account significant progression in vehicle electrification and the light of its national circumstances; waste management. Moreover, these targets are to a backdrop of Iceland’s pre-2005 full transition of its energy production and district heating to renewable sources (hydro and geothermal). Fairness considerations, including reflecting on Iceland regards its nationally determined contribution to represent its fair share of the efforts 6b equity; to achieve the global long-term goal of the Paris Agreement. Neither Iceland’s INDC (1st NDC) submitted in 2016 nor its update submitted in 2021 detailed Iceland’s respective fair share in the EU’s climate targets which they set out to collectively How the Party has addressed Article 4, paragraph deliver. In this revised NDC, Iceland establishes a specific target for emissions in sectors that 6c 3, of the Paris Agreement; correspond to its expected fair share under the EU Effort Sharing Regulation. By setting a clear quantified target, Iceland believes its revised NDC more clearly represents a progression from the INDC which only states the intent to collectively deliver the EU’s climate targets. How the Party has addressed Article 4, paragraph 6d By having an economy-wide target, Iceland complies with this provision. 4, of the Paris Agreement; How the Party has addressed Article 4, paragraph 6e Not applicable. 6, of the Paris Agreement How the nationally determined contribution 7 contributes towards achieving the objective of the Convention as set out in its Article 2: How the nationally determined contribution Iceland considers its enhanced NDC to be in line with the objective of the UNFCCC and long- 7a contributes towards achieving the objective of the term goal of the UNFCCC Paris Agreement, as explained in 6a. Convention as set out in its Article 2; How the nationally determined contribution 7b contributes towards Article 2, paragraph 1(a), and See further 6a and 7a. Article 4, paragraph 1, of the Paris Agreement.