The ban was put in place between 27 April and 2 June 2023 on the grounds that some Icelandic offtakers were using the location-based approach to claim renewable energy consumption, thereby leading to double claiming. After a review process, the AIB decided not to reinstate the suspension of exports of EECS GOs out of Iceland, leaving Icelandic authorities to deal with the issues internally.

Recently, Landsnet passed a member audit and implemented new issuing rules, in force since 25 August 2025, introducing new provisions on data collection and information disclosure by production devices to ensure the integrity of the GO issuance in accordance with AIB EECS rules.

Changes to the rules

While the old rules covered certification of plants, the new set, in addition, covers the issuance process, and data collection and information duties of applicants.

Applicants now need to fill out a dedicated application form, choosing between EECS-compliant GOs or national GOs that do not follow EECS rules. Veyt notes that there are no national GOs in Iceland: Landsnet issues only EECS-compliant GOs. They need to state that:

• no contractual or derived obligations limit their right as a producer to transfer the GOs;

• the application complies with all relevant laws, standards and requirements for GO issuance;

• whether they received investment/operational subsidies, and the market value of GOs was taken into account

The first two points practically mean that no contractual or marketing claims convey renewable attributes outside cancelled GOs. According to the AIB, the step would “prevent parallel claims of the same renewable attributes”.

The Icelandic domain protocol was updated in the summer of 2025 to include changes to the issuing rules.

The new rules ensure that producers shoulder part of the responsibility for double claiming. Local market players report that the process requires more paperwork, but it does not lead to a substantial increase in GO issuance costs.

These steps are meant to strengthen the measures against double-counting and reinforce the Icelandic GO system’s credibility.

Market impact

Icelandic demand for RES-E GOs shot up to 4.26 TWh in the 2024 disclosure period compared to 1.36 TWh in 2023. However, it is better to compare renewable cancellations with the 2022 disclosure period (3.75 TWh), since 2023 proved to be an exceptional year because of the Icelandic GO export ban, which affected the Icelandic GO credibility due to the double claiming issue. National registry data shows that this increase in demand can be comfortably accommodated by local supply, which stands at 14.57 GWh so far in 2025.

Since the 2024 disclosure deadline, demand seems to have increased further as cancellations for renewable GOs increased by 0.9 TWh during Q2-Q3 2025, up from 0.1 TWh for the corresponding period in 2024.

Such a rise in demand both in the 2024 disclosure window and 2025 can be attributed to legislative drivers – the Corporate Sustainability Reporting Directive (CSRD) and Rio Tinto’s embrace of the market-based reporting.

The aluminium producer, which historically relied on location-based accounting, has adopted the market-based method in 2024 at the same time as the sustainability reporting requirements stemming from the CRSD started to apply and now purchases GOs for the ISAL smelter in Iceland.

In contrast, another aluminium giant, Alcoa, which also has operations in Iceland, does not procure GOs for Scope 2 emissions reporting. During the RECS GO Day in Norway in November 2025, an Alcoa representative explained that it is the company’s global strategy not to procure EACs since most customers do not ask for them and are not willing to pay the price premium (however, he noted that the automotive industry prefers steel with market-based reporting). For their smelter in Eastern Iceland, Alcoa has a PPA without bundled GOs. It is uncertain if the new requirements will have any impact on their or other companies’ policies towards GO procurement in Iceland.

Our medium-term forecast projects a demand increase of less than 1 TWh in Iceland on a year-to-year basis, and supply is expected to stay flat. Thus, we do not expect any price movements as a result of the new Icelandic rules.

For the procurement of electricity, PPAs have long been a common tool in the Icelandic market. The popularity of PPAs could be largely attributed to the lack of other long-term hedging possibilities. In the past years, two platforms started auctions for long-term electricity contracts: the Icelandic power exchange Elma, also operating the day-ahead market, and another licensed exchange Vonarskard.

Since March 2025, Vonarskard has been organising auctions every month for yearly and monthly baseload power products. Current auction results show liquidity for yearly products until 2030 and monthly products until mid-2027.

The Elma platform does not adhere to a standard schedule, instead auctions are initiated by market participants who can set the terms of the auction. Technically, this platform can be used to offer and bid for tailored PPA contracts. But since the start of operations in May 2024, only four auctions have been conducted, all of which were initiated by the TSO Landsnet to offset their grid losses. None of the contracts traded on the two platforms includes GOs by default.

A more market-based approach to trading and hedging of power could dampen the interest in PPAs, as volumes from both the seller and buyer sides shift towards standard contracts. Though information on bilateral deals is rarely disclosed in Iceland, making it difficult to estimate market size and impact, we could expect a reduction in PPA market volume in line with activity on the platforms for long-term contracts.