iðnaðar- og viðskiptaráðherra
Towards a Hydrogen Society
Consular Conference, October 3rd, 2003
Ambassadors and Consuls, Ladies and Gentlemen:
It is naturally both an honour and a pleasure for me to address you here today. And it is no less interesting and enjoyable to meet those people who represent Iceland in foreign markets. It seems that, in today's world, those countries which successfully face new challenges are those who do not stand isolated in the world economy. We need to combine our strengths. This can take the form of domestic and international co-operation between private and public partners. Or companies can develop as clusters, or use networking to gain advantages of size. Domestic as well as cross-border co-operation is thus much more important than before for strengthening the economy, culture and standard of living within regions and countries.
Iceland achieved a very good economic performance for most of the 1990s. The country had one of the highest growth rates in the world, as well as low inflation and unemployment at the same time. The key factor contributing to this success has been the country's ability to adapt – to face new challenges. The EEA Agreement is an example of Iceland working with other countries to increase trade and welfare. It represents the largest step taken by Iceland in this direction.
Iceland has benefited greatly from the European single market and the EEA Agreement. It has brought many reforms and changes in various fields during the last 9 years and additional structural reforms have also been made by the Government in several fields. I could mention changes to the financial markets, research, the labour market, the tax system, energy, transport, competition rules, privatization, regulatory reform, development of the Iceland Stock Exchange, and business-friendly tax reforms.etc. Last year, for example, the Government decided to slash corporate income tax from 30% to 18%. This is among the lowest rates in Europe. And companies can now select the currency in which they keep their accounts.
In addition, the Government has maintained stable and solid economic, innovation, social and natural resource policies for the past several years. The result can be seen in increased productivity and steady economic growth, which has been higher in Iceland that in most neighbouring countries for the past several years. Real disposable income of households has also increased by about one-third since 1994.
The fishing and energy industries are still the key areas of economic activity in Iceland. The biggest investment ever undertaken in Iceland is now underway on the east coast – where the aluminium producer Alcoa is building a new aluminum smelter. The National Power Company is building a hydropower plant to provide energy for it. This is investment in renewable energy. This project will have great economic benefits in coming years.
Recent global trends have opened up new opportunities and Icelandic companies are now active on this global market. Some of our largest companies today are in the pharmaceutical business, prosthetics manufacturing, banking and investment activites. Software is a fast growing sector and bio technology has become a new area of activity in the Icelandic economy. Icelandic companies have been investing abroad on a larger scale than ever before, while at the same time we have seen greater foreign investment in Iceland than before. This shows how much closer the Icelandic economy is now linked to that of the rest of the world.
Discussion of global energy issues has increased greatly in recent years. At last year's Summit Meeting in Johannesburg on sustainable development, much of the discussion focused on energy matters. The emphasis was on how the role of renewable energy sources could be increased in order to reduce emissions of greenhouse gases and other damage to the environment. In my opinion it is very important for all nations, who are able to do so, to use their sustainable resources well in order to achieve this objective.
Iceland is the only western country that produces all its electricity from renewable natural resources, and almost 90% of all heating is based on geothermal sources.In fact, 72% of the total gross energy used in the country comes from renewable energy resources, the highest share in the world.
This success is a result of making renewable energy a long-term priority in Iceland. And we are also fortunate in having access to huge and sustainable energy resources: non-polluting and emission-free hydro and geothermal power. Making use of these renewable energy resources has also been one of the driving forces behind the nation's increased welfare over the past few decades, not least due to foreign investment.
For many years, it has been the policy of the Government of Iceland to increase use of renewable energy resources to help the environment. Making hydrogen a priority for research and development is just one part of this long-term policy.
For many years hydrogen has been on the research agenda in Iceland. In 1998 the Government made a clear statement on its intent to progress towards a Sustainable Hydrogen Society. The Government's plan has 5 aspects: 1) forming policy, 2) creating a favourable framework for business, 3) ongoing research, 4) international co-operation and 5) education and training. This policy is also an important part of our long-term policies on renewable energy and climate.
In April this year, the first hydrogen refueling station in Iceland was opened. It is the first one in the world built at a normal gasoline station. That event was an important step towards a Sustainable Hydrogen Society in Iceland. Open the station was a part of the ECTOS project, an international co-operation project between the Icelandic group Eco Energy and the foreign partners, DaimlerChrysler, Shell, Norsk Hydro and the European Union. They formed the company New Icelandic Energy to run the project. This week, three hydrogen buses arrived in Iceland as a part of this project. They will be part of the City of Reykjavik's bus fleet, and at the same time will be used for testing. They will provide us with valuable answers on social, economic and technical questions.
The ECTOS project was the first of its kind in Europe, and has been used as a model for similar projects in other European countries. In this project we see clearly how important international co-operation is. It also provides a good example of how we can successfully take advantage of opportunities on global markets. The key elements of the project are Icelandic innovation/entrepreneurship, knowledge and research, and international partnership and co-operation. In other words - the key elements are human resources.
One important element of our hydrogen policy is to create a favourable International Platform for Hydrogen Research in Iceland. The ECTOS program is a good example of such a case. While Iceland alone is not capable of making major advances in this area, in co-operation with others further steps can be taken.
Indeed Iceland has taken further steps towards international co-operation in the area of Hydrogen. A few days ago the Icelandic Government and the Government of Manitoba in Canada signed a Memorandum of Common Understanding on Hydrogen Development. The two regions will investigate the benefits of exchanges of people and information. They will have joint research and training projects linked to hydrogen development activities. At the same time, about 30 top government officials, industry executives, and experts, came to Iceland from the US states of Iowa, Minnesota, North and South Dakota. They were also looking for knowledge and partnership in the area of renewable energy and hydrogen. Other similar memoranda have been agreed upon recently, and new projects are on the table in co-operation with the European Union.
New, highly interesting steps will be taken in November when Iceland will become one of 14 founding countries of the International Partnership for Hydrogen Economy. This will take place in Washington – hosted by the US Department of Energy. This event will hopefully create additional opportunities, benefits and value in the field of hydrogen. We are looking forward to and have high hopes for this co-operation.
In the past and months and years an increasing number of delegations have come to Iceland, from different parts of the world. There have also been many requests from foreign media, seminars, universities, etc. for information concerning hydrogen and renewable energy in Iceland. It seems that the Hydrogen Policy of the Government, and the attention drawn by the ECTOS project have made us known in various parts of the world. I hope this will help us to add more projects to the International Platform for Hydrogen Research in Iceland.
Our long-term vision is to have renewable hydrogen fuel replace the fossil fuels used by our transport sector and fishing fleet, as soon as it becomes technically and economically possible. This will mean better use of renewable energy and less pollution, help prevent climate change and the improve the environment in general. In turn this will bring economic benefits and better public health.
Ladies and gentlemen,
There are plenty of opportunities in our changing world today. I hope that Icelandic businesses will be able to take advantage of them and play a role in the hydrogen sector and in other sectors as well. With your help and through co-operation with others we will have solid base to work on.
It has been both enjoyable and informative to be here with you today. May I wish you all the best in your endeavours .