World’s first green methanol production could end up in most Icelandic cars

Roughly a year after construction began on Iceland’s new methanol fuel factory, it has now opened and is at full production capacity. Its environmentally-friendlier renewable fuel may well be used in almost every car in the country. The factory is the first of its kind in the world.

“The methanol here is made by taking carbon dioxide from the waste geothermal steam from the nearby HS Orka power station and then electricity from which we make hydrogen and these two are mixed together to create methanol,” says plant chief Benedikt Stefansson.

The methanol is to be mixed in to normal petrol to make a fuel suitable for existing petrol-driven cars.

“This is really the first time when we have mixed environmentally friendly Icelandic fuel into petrol so that we now have Icelandic fuel in petrol cars which is made from Icelandic energy. We hope that as time goes by people will be able to use this alone to reduce the amount of petrol being imported. But to start with we are making a low-level mixture which suits all petrol cars so that everybody can use this sort of mixed fuel in their cars,” Stefansson explained to

To begin with the new fuel is only available at the N1 station on Kringlumyrarbraut in Reykjavik. It is two kronur per litre cheaper than normal petrol. Stefansson believes, however, that the fuel’s biggest benefit is in reducing pollution and making cars a little kinder to the environment.

He explains that usually there are two sets of carbon dioxide being released into the atmosphere: waste CO2 from the geothermal power station and waste CO2 from car exhausts. The new fuel means the CO2 will only come from cars and the fuel will have travelled less distance to reach the cars in the first place.

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