People importing methane powered cars to Iceland are exempt from paying import duties, which might seem like a good thing; but it does not help people eager to convert their existing petrol or diesel cars to also use methane. Read the full story

A company called Carbon Recycling International is preparing to build a combined geothermal power station and liquid fuel factory near Grindavik, Southwest Iceland. The factory could produce up to a hundred million litres of fuel per year.

Carbon Recycling International and Grindavikurbaer municipality yesterday signed a memorandum of intent for the factory, which will be a combined geothermal power station and liquid fuel factory. A statement says that the company has developed a way to create methanol from geothermal waste emissions and hydrogen by electrolysis. The methanol is then used as a mixer with petrol for normal, unmodified road cars.

The anticipated factory would produce up to a hundred million litres of fuel per year, mostly for export. It would use 50 megawatts of electricity in the process from its own geothermal station. It is hoped all the required electricity can be generated on-site to avoid the need for new power lines. The geothermal plant’s waste carbon dioxide and sulphur dioxide will then be used to make liquid fuel and not released directly into the atmosphere, RUV reports.

Europe’s biggest fleet of hydrogen powered cars can be found in Iceland, following the recent arrival of ten new hydrogen cars to the country. Iceland’s total fleet now consists of 22 such vehicles. Read the full story

Retired athlete Einar Vilhjalmsson and television news journalist Omar Ragnarsson last weekend drove the ring road all the way round Iceland in a car powered by Icelandic methane. Never before has the ring road been navigated in a motor vehicle powered solely by Icelandic fuel. Read the full story

Althingi, the Icelandic parliament voted to raise taxes on alcohol, tobacco, vehicle duty and fuel late last night. Read the full story

Norway plans to use some of its vast sovereign wealth fund to develop sustainable energy. Despite being flush with oil, an unspecified proportion of Norway’s USD 400 billion savings account called the Government Pension Fund is being earmarked for investment in environmental projects that not everyone in the government approves of.

As one of Europe’s main producers of gas and oil, Norway has decided it has an ethical obligation to help reduce carbon emissions. Carbon capture and storage is a particularly hot issue right now. Deputy Finance Minister Henriette Westhrin recently told a conference on green energy that “we believe we see a trend developing among large, institutional investors in the direction of setting up smaller funds earmarked for special purposes [such as] environmental issues.”

Read the full story

In its latest bid to cut costs, airline Norwegian has asked its employees to take a wage cut. Staff who accept the wage cut of between 5 and 10 per cent will be compensated with share options in the company, according to Aftenposten.

Information chief Anne Grete Ellingsen told the news bureau NTB, “High fuel prices have forced us to cut costs. In addition to voluntary wages reductions we are considering technical solutions like flying more slowly during sections of the flight”. Employees who choose the wage cut option will be issued share options in the airline which they can cash in at a hopefully higher share value once the market and the carrier rebound.

The last six months have been a trying period for Norwegian, which recently reported a loss of around USD 55 million, mainly due to the huge rise in fuel costs. Despite big losses from the first half of 2008, Norwegian is pushing ahead with plans to buy new planes for its fleet. Plans to acquire 53 new aircraft were in place long before the current crisis.

“The financing of these planes is in order and deposits have been paid. The Board want to issue shares in order to raise another NOK 400 million (USD 80 million), says Ellingsen. The carrier will lease 15 of the new planes, beginning in 2008, and will receive the remaining planes between 2009 and 2014.

Hertz Iceland recently became the first company to offer fully hydrogen-powered cars for rent. The first hydrogen fuel station opened in Reykjavik in 2003, which makes filling up one of Hertz’s three converted Toyota Prius cars a breeze.

For those who want the hydrogen experience but who don’t want to drive, the first hydrogen powered commercial vessel started sailing the Icelandic waters in April. The Elding boat offers whale watching tours for EUR 43 (USD 66) a trip and has got good reviews. Not only is the hydrogen-powered engine environmentally friendly, but it is easy to shut down, which allows whale watchers to enjoy the sounds of whales swimming and blowing, something a diesel engine on most boats does not allow.

The hydrogen powered ships and cars are just a few ways that Iceland is using to become a carbon-neutral nation. Already, the country derives 80 per cent of its electricity from hydropower projects and most of the rest of its electricity from geothermal projects. Transportation, including cars and fishing boats, remain the largest challenge to Iceland’s becoming carbon neutral and if the Elding and the converted Prius are a success, Iceland could be well on its way to achieving its environmental goals.

It sounds almost too good to be true, but a new company, Carbon Recycling International, makes clean fuel out of pollution.

The company captures carbon from industrial emissions and converts it to synthetic methanol, petroleum and diesel.

The conversion process has traditionally been prohibitively expensive and polluting, but using Iceland’s endless supply of cheap, renewable energy has proven a successful formula.

Carbon Recycling International was founded in 2006 as a joint Icelandic-American enterprise, supported by academic institutions and energy companies, among others.

It is no coincidence that the business was founded in 2006: the company makes a profit when its fuel can be sold for over USD 50 per barrel and oil prices passed USD 50 in early 2005. The current price of oil is more than double that amount.

At a time when the world is becoming increasingly worried about oil prices and climate change, and when Iceland is making an ever bigger splash in the renewable energy sector, Carbon Recycling International’s future looks increasingly bright.

US ambassador to Iceland, Carol Van Voorst, recently toured the company’s prototype fuel conversion plant, which is already producing limited amounts of fuel that can be used in existing automobiles.