Iceland's New Aquaculture Bill: The Fight Over the Country's Future

The big picture: Iceland's Parliament has released its long-awaited Aquaculture Bill (S-252 /2025) for public comment until January 26, setting up a showdown between the government's vision of regulated expansion and conservationists demanding an end to sea cage farming.

Minister of Industries Hanna Katrín Friðriksson describes the bill as taking "environmental considerations and animal welfare into account," with incentives for closed-containment systems and sterile salmon. But critics say the legislation fails to mandate the modern technology needed to protect Iceland's fjords and wild salmon, allowing unlimited expansion with inadequate penalties for pollution and escapes. As a result, “the costs of sea cage salmon farming are socialized, falling to the public, while profits are privatized and sent overseas,” according to Elvar Fridriksson, CEO of Iceland’s North Atlantic Salmon Fund.

Why it matters: With more than 65% of Icelanders opposing sea cage salmon farming and just 13.9% in favor, this bill will determine whether Iceland protects its pristine reputation or risks it for an industry that employs 200-300 people.

The timing is particularly significant as the industry faces multi-million dollar penalties for environmental breaches in Chile, bans in the United States, and phase outs in parts of Canada. Meanwhile, at home, one of Iceland's two largest salmon farming operations faces police investigation for alleged violations of local animal welfare regulations, while another confronts a landmark lawsuit seeking revocation of its sea cage farming permits.

The bill's critical flaws

The legislation includes positive elements—single operators per disease control zone, reduced fees for closed systems, and increased monitoring funding. But conservationists argue these improvements are overshadowed by fundamental problems.

No hard cap on expansion. The bill sets no binding limit on total fish biomass in Iceland's fjords. New sea cage zones can still be licensed, no new fjords receive protected status, and genetic risk assessments remain advisory rather than mandatory, subject to the whims of politically appointed overseers. Carrying-capacity assessments are structured to enable growth rather than limit it.

Currently, approximately 30 million farmed salmon would be permitted in Iceland's fjords while only 60,000 wild salmon return to the country's rivers annually—a ratio that alarms scientists tracking the 75% decline in wild Atlantic salmon populations since 1970.

De facto property rights for foreign corporations. The bill creates "Laxahlutur" quotas that establish property-like rights, potentially forcing Iceland to compensate foreign corporations if licenses are later reduced. In a viral op-ed, Vala Árnadóttir, an Icelandic Wildlife Fund board member and attorney, warned: “the salmon quota converts a temporary licensing system into a permanent rights system, whether operating licenses are temporary or permanent. It shifts the risk from the companies to the state and taxpayers."

Combined with permits lasting up to 16 years with renewals, this could lock Iceland into sea cage farming for decades.

At the same time, the bill merely incentivizes safer technology through fee discounts rather than mandating closed-containment or land-based systems. Iceland is internationally recognized as uniquely positioned to lead in land-based aquaculture, with abundant renewable energy, naturally filtered seawater, and proximity to international shipping routes—yet sea cages remain the default option under this legislation. Three entire chapters are dedicated to managing mortality, lice, and disease—normalizing these outcomes rather than preventing them through required technology standards.

Competing visions

‍What supporters say: Minister Friðriksson emphasizes that "both Icelandic society and companies in aquaculture have long called for a clearer legal framework for the industry." She highlights the bill's environmental provisions and notes it will "simplify public administration" while ensuring fees don't compromise competitiveness.

The legislation proposes dissolving the Aquaculture Fund and directing payments directly to municipalities hosting sea cage operations—a move the minister frames as supporting rural communities.

What critics argue: "What strikes you most when reading the new bill is how incredibly [salmon] farming-oriented it is, considering the interests of the operators of sea cage farming. It is actually much worse with regard to the interests of fishing associations and wildlife,” states Jóhann Helgi Stefánsson, CEO of Iceland's Federation of Fishing Associations, in a statement made to mbl.is.

Environmental groups argue that the bill enables expansion of a high-risk, low-return industry. They point to sea cages discharging untreated waste, pharmaceuticals, and excess feed directly into public waters, with each ton of farmed salmon producing waste equivalent to 16 people.

Regular escapes continue threatening wild salmon genetics. Disease outbreaks and sea lice infestations have plagued Icelandic operations, forcing emergency harvests and raising questions about the model's viability in Iceland's conditions.

‍The economic calculation. Conservationists argue that Iceland's pristine waters and untouched nature drive tourism, making fjord pollution an existential threat to the larger industry. As tourism experts have noted, visitors from around the world come specifically to experience Iceland's unspoiled environment—an image fundamentally incompatible with industrial sea cage operations.

Tourism dwarfs aquaculture revenue:

• Sea cage salmon farming: ~54 billion ISK annually
• Tourism: ~964 billion ISK annually (roughly 18 times more)
• Aquaculture jobs: 200-300 positions
• Tourism employment: Tens of thousands across the country

Tourism contributed approximately 9% to GDP in 2023 and accounts for 9.7% of Iceland's total working hours. The industry is Iceland's third-largest employer, having become the economic lifeline after the 2008 financial crisis.

Industry mortality rates raise questions. Up to 40% of salmon in Icelandic sea cages die before harvest. Recent mass die-offs at operations like Icelandic Salmon have forced reduced harvest volumes and revenue drops as biological issues ravaged facilities.

The path forward

What conservationists want:

• Set a clear phase-out date for existing sea cages
• Stop issuing new licenses for sea cage operations
• Mandate transition to closed-containment or land-based systems

Land-based alternatives are already emerging. The coastal town of Þorlákshöfn's "Salmon Row" hosts multiple companies building large-scale facilities using recirculating aquaculture systems. First Water has harvested 2,000 tons from its facility and targets 50,000 tons annually by 2030—all without polluting fjords.

Even Norway, the epicenter of traditional sea cage farming, now encourages farmers to attempt closed containment in environmentally fragile areas, recognizing fundamental problems with sea cages.

The January 26 deadline. Icelandic NGOs such as the North Atlantic Salmon Fund and a coalition of Icelandic landowners, business leaders, and scientists are mobilizing public comment before the deadline. They've pledged to work with Parliament on protective solutions while holding accountable leaders who "sell off Iceland's natural resources to benefit foreign corporations."

Bottom line: Iceland faces a choice between short-term revenue for primarily Norwegian corporations and long-term protection of the pristine environment underpinning its largest industry. The bill can still be amended—but only if public pressure matches the urgency of the moment.

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Go deeper: Read about Iceland's pivotal role in Atlantic salmon conservation and why this legislative moment matters globally.

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