The profile for greenhouse gas (GHG) emissions differs depending on the definition of the accounting behind the statistics. Statistics Iceland recently published an emission account for the Icelandic economy for 1995 to 2016. The Air Emission Account (AEA) gives a different profile from the report of emissions from Iceland, or National Inventory Report (NIR) that The Environmental Agency submits to the United Nations Framework for Climate Change (UNFCCC). It is important to have a thorough understanding of the difference in statistical scope behind the reported values before drawing conclusions and doing any analysis based on these numbers. The differences can be used to build a better understanding of GHG emissions into our environment.

The NIR includes emissions from land use, land use change, and forestry (LULUCF). This segment, which is often the largest single source of GHG emissions, is not included in the AEA since land area is not considered a part of the economy. Subtracting the LULUCF from the total reported in the NIR leaves emissions due to energy production activities such as fuel combustion, and material use in industrial processes, farming and waste management. These activities are also included in the AEA. The figure below shows the total emission of carbon dioxide (CO2) from the economy (AEA) and the total emission minus LULUCF from the NIR.

The total emissions of CO2 from Iceland (less LULUCF) in 2016 is lower than in 2008 and has remained approximately constant since 2010. The total CO2 emissions from the economy has, however, increased sharply from 2012. Emissions from the economy have been greater than emissions from the land space of Iceland since 1995.

The AEA accounts for emissions from operations of Icelandic companies and residents of Iceland, independent of where they are located. In this manner, emissions from the operation of Icelandic airlines abroad are accounted for, whereas emissions from foreign operators in Iceland or abroad are not. Similarly, emissions released by the operation of the Icelandic shipping and fishing fleets are accounted for, but foreign operators fishing in Icelandic water are not included in the Icelandic account. The resident principle is one of the key definitions in the AEA. The AEA divides emissions according to economic statistical groupings (NACE rev. 2, or the group and division from ISAT-2008). Emission values are not separated by activity or material use that causes GHG emissions.

The NIR covers emissions that occur within the geographic areas under Icelandic control. The definition of geographic area includes airspace that airlines use in domestic flights and airspace up to 3000 feet for airlines in international flights. Therefore, emissions from planes in the NIR include all domestic flights and the portion of international flights from landing to take-off up to 3000 feet (LTO). The geographic area also includes oceanic areas used by ships that sail between ports in Iceland for all fishing vesselsand five nautical miles for international maritime traffic. This means that all Icelandic fishing vessels that berth in Iceland, and national ferries, and a small portion of international shipping vessels are included. Oil purchases by foreign and international shipping operators are, however, included in annex figures. The NIR then sections emission figures by activity and material type.

Total emission of carbon dioxide from the NIR and AEA
Report Value   1995 2000 2005 2010 2015 2016
IPCC A Total 10,080 10,621 10,740 11,570 11,470 11,402
  B Total less land use 2,465 2,934 2,969 3,621 3,536 3,490
AEA C Total 2,805 3,644 3,757 4,367 5,090 5,619
  D Residents abroad 372 622 654 654 1,071 1,381
  E Non-residents on territoy 300 395 254 279 407 425
  F = C-D+E All operations on territory 2,732 3,417 3,356 3,992 4,426 4,664
  G = F-B Difference 267 483 387 371 889 1,174
  H = G/F Ratio 10% 14% 12% 9% 20% 25%
Notes: Residents abroad: Fuel purchased abroad by Icelandic airline operators, shipping and fishing fleet, construction and fuel purchases of Icelandic tourists abroad.
Non-residents on territory: Fuel purchased by non-resident airline operators, shipping and fishing fleet, construction and fuel purchases of tourists.
An adjustment of AEA total by I = C-D, which could be labeled as “Resident operations on territory” results in a value which is much closer to the value B. This value is, however, not compatible in scope

Total emissions from the economy are greater than the total from the NIR (less LULUCF) as long as operations on the land space are in the hands of resident corporations (with Icelandic tax identity numbers). Countries which outsource the majority of transportation services and have little local industry will have AEA emissions below that of the NIR.

The AEA includes several bridging items that can be used to further analyse the difference between the NIR and AEA totals. Fuel and material purchases of residents abroad are reported in item D in the table, whereas fuel purchases of non-residents on the territory are in item E. Subtracting activities of residents abroad and adding the operations of non-residents on the territory should make the AEA values more compatible with the NIR value in B. The adjusted AEA value for the Icelandic economy is, however, always greater than the NIR total, since the NIR values only consider the domestic flights.partially count emissions from airline operations (after take-off) and the emissions from ships with destinations in foreign ports. The growth in the difference (item G in the table) indicates that the sales of fuel to international transportation have increased significantly in recent years, which corresponds with the rapid growth in the maritime and airline sectors. Further analysis of the figures will be published separately on October 30, 2018.

The NIR and AEA are both considered correct numbers for greenhouse gas emissions from Iceland. The underlying questions in the two are, however, different. The NIR report is the official statistics that Iceland submits in connection with the nation’s environmental commitments, such as the Kyoto protocol and the Paris agreement (COP-21), and gives a good profile of how large a portion of emissions comes from fuel consumption and how much comes from industrial processes. The AEA adds information to the NIR report as well as giving a different viewpoint of which economic activities leave the greatest footprint in the environment and where the greatest reduction can be achieved.  Both reports are based on the same scientific framework of IPCC.

Coinciding with this publication, several changes have been made to the online data repositories of Statistics Iceland. The information on the website will now include:

  • Detailed data for greenhouse gasses from the AEA, 1995-2016
  • Data for greenhouse gasses from the AEA, summary view 1995-2016
  • Detailed data for greenhouse gasses from the NIR report from Iceland, 1990-2016
  • Data for greenhouse gasses from the NIR report from Iceland, summary view 1990-2016

Statistics Iceland recently submitted the accounting of air emissions from the Icelandic economy to Eurostat. This is the first time Iceland has submitted this report. The AEA summary is based on data from the NIR and fuel reports submitted to the International Energy Association by the National Energy Authority. Data from the Icelandic Transport Authority, data from the Icelandic Directorate of Customs, and other Statistics Iceland data are used to segment emissions from road transport. Icelandic entities and individuals with Icelandic identification numbers that reside in the country are included in the figures, but households with permanent residency abroad are not taken into account. Uncertainties can be expected in the data since emissions are expected to occur simultaneously with the purchase of material. Several assumptions are also made in model constructions. The key assumptions include that of environmental mitigation technology by each economic sector and technological stage by economic sector. The figures will be published annually.