European watchdog takes Iceland to court over waste management failings

Iceland is facing court proceedings for not meeting European Economic Area (EEA) waste management targets. However, according to Icelandic professor Guðmundur Kristján Óskarsson, the country’s recycling streams are improving despite infrastructure and sparse population challenges.

In April, the European Free Trade Association Surveillance Authority (ESA) opened two legal proceedings against Iceland for failing to comply with EEA rules on landfill and packaging waste management under the Waste Framework Directive. 

The ESA monitors compliance with EEA rules in Iceland, Liechtenstein, and Norway.

Packaging Insights speaks to Óskarsson, associate professor at the School of Health, Business, and Natural Sciences at the University of Akureyri, and an ESA spokesperson, about the country’s Municipal Solid Waste (MSW) services and the legal proceedings.

MSW in Iceland is sent to landfills, recycled, or burned in one of its few incinerators. In 2022, about 39% of mixed urban waste was sent abroad for energy production. In January 2023, a new law on waste in Iceland aimed to reduce the amount of packaging waste and promote recycling initiatives.

“Iceland has been struggling to meet the targets set — there is no doubt about that. According to the target, the landfill rate has been far too high,” says Óskarsson.

“However, aside from that, waste management in Iceland is a highly regulated industry, comparable to other Nordic nations.”

Sparse population, remote settlements, and inadequate infrastructure hinder regional MSW systems.The Directive requires EEA countries to prepare for reuse or recycle 55% of their MSW, and to recycle more than 65% of their total packaging waste, by 2025. 

“Further material-specific targets are foreseen for packaging made of glass, ferrous metals, paper and cardboard, plastic, and wood. A target to divert municipal waste from landfilling is also foreseen by 2035,” says the ESA spokesperson.

Population problems 

Iceland has a population of around 390,000 people, 64% of whom live in Reykjavik. According to Óskarsson, the eight most populated municipalities (out of the 62 municipalities in Iceland) have about 77% of the inhabitants, but they only cover about 1.2% of the area in Iceland. 

The ESA has opened legal proceedings as municipalities in Iceland have not adopted regional waste management plans, as required under Article 28 of the Directive. 

“Under the Directive, EEA states are required to ensure that waste management plans and waste prevention programs are in place for the entire country. These instruments are central to achieving sustainable waste treatment, reducing environmental impacts, and promoting a circular economy,” says the spokesperson. 

Óskarsson points to regional population concentrations as an essential factor impacting the effectiveness of MSW services — only one of the eight most populated municipalities is outside southwestern Iceland.

“Outside the capital area, sparse population, remote settlements, and lack of infrastructure make it hard for municipalities to manage waste efficiently.”

“There are high transportation costs, and small municipalities do not have the funds to invest in infrastructure. Many rural municipalities implemented the coordinated waste collection system in 2024 instead of 2023 — things take longer in the less populated rural municipalities.”

Iceland's Úrvinnslusjóður collects and administers recycling fees for various types of waste.Reaching targets

However, Óskarsson’s overall assessment of waste management systems in Iceland is positive. While he cites that a lack of recent publicly available data makes the state of MSW services in Iceland hard to evaluate, the overall situation is on the “right track”.

“The development in waste management in the last two years has been positive. Sorpa (the largest operator in the capital area) has now reached the 10% landfilling target by exporting waste for energy recovery through incineration,” he says.

“One very good thing about waste management in Iceland is Úrvinnslusjóður. The organization collects and administers recycling fees for various types of waste, and the fees are used to handle the waste responsibly and recycle it as much as possible.”

Legal action

In addition to opening infringement proceedings, the ESA sent Iceland a letter of formal notice for failing to comply with EEA rules. 

The spokesperson says: “Several municipalities in Iceland have yet to adopt regional waste management plans. In addition, the national waste prevention program has not been updated in line with Article 29 of the Directive, which requires periodic evaluation and, where necessary, revision of such programs.” 

“The ESA’s decision is understandable,” says Óskarsson.

“Iceland prepared well, but did not use that time very well. Only now, when the deadline is over, can we see some actions to improve things in the last two years. The situation now is much better than the available data from the 2022 survey.” 

Building more waste incinerators can improve waste management in Iceland, says Óskarsson.Waste reform

Building more waste incinerators can improve waste management in Iceland, according to Óskarsson. They are needed to divert waste from landfills and reduce exported waste. 

“Although some waste is now exported to be incinerated, it is not a long-term solution. There are reports on building incinerators, so the government has all the information needed to decide.”

Óskarsson also argues for more investment in recycling infrastructure to combat Iceland’s MSW challenges. 

“The smaller, more remote municipalities do not have the funds to invest, so the government must help them with financial aid. Waste management data could also be better. Although they improve yearly, and the government works on improvements, it could be done quicker.”

Last week, the ESA visited Reykjavik to meet with the Icelandic Government, including Prime Minister Kristrún Frostadóttir, to discuss issues related to the EEA. During meetings, various EEA-related aspects were discussed, including the timely implementation of EEA acts like the Waste Framework Directive. 

Óskarsson concludes: “At the moment, Iceland is on the right track in waste management.”