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On March 15, 2003, Landsvirkjun and Alcoa, together with the Icelandic Government and the local authority of Fjarðabyggð, signed an agreement that Landsvirkjun would construct Kárahnjúkar Power Plant and Alcoa would build and operate the Fjarðaál aluminum smelter at Reyðarfjörður. Previous developments had culminated on March 5, 2003, in legislation by the Althing that authorized the two companies involved to complete the contracts for these projects.

At that time, the power plant, aluminum smelter, and transmission lines were the biggest single construction project ever undertaken in Iceland and drew considerable attention. The conclusion of the environmental impact assessment had pointed out positive effects on society and the economy. The environmental effects were also set forth, indicating how mitigation measures could reduce the negative effects. Alcoa issued a public statement to the effect that the Fjarðaál smelter would be designed in such a way that pollution from it would be some of the least that are known of anywhere. For its part, Landsvirkjun had the policy of designing the power plant so that it would stand up to international comparison and have the least possible environmental impact. When the projects are referred to in connection with the Sustainability Initiative, the projects meant are those related to Kárahnjúkar Power Plant and the aluminum smelter at Reyðarfjörður.

Even though all official permits had been obtained for construction, many people were concerned about their impact on the environment, the economy, and various social issues. On the other hand, the two companies were obligated to minimize project impacts on the environment. Still, they wished to engender the greatest possible economic and social benefits for East Iceland. Cooperating on the Sustainability Initiative enabled them to meet their obligations more easily.

However, neither of them had a model for carrying out the Initiative because it turned out to be a pioneering program, not just in Iceland but worldwide. Moreover, when the projects were launched, there was no awareness of any similar programs having ever begun before. Therefore, an Advisory Group was formed to design the Initiative, which included representatives from various social groups, both those favoring the projects and those opposed.

Milestones so far

  • 2004
First Advisory Group meeting - June
Second Advisory Group meeting - turn of the month August/September
Third Advisory Group meeting - October
Opening of the Advisory Group website
  • 2006
The new website opened for the Initiative - October
  • 2007
An initial meeting of Phase 4, in Végarður Visitor Center on 18 October. Landsvirkjun and Alcoa representatives met with Ívar Jónsson from the East Iceland Knowledge Center (Þekkingarsetur) as he took over Sustainability Initiative operations
  • 2008
Re-assessment of the Initiative - June
Initiative Management assumed by Húsavík Academic Center (HAC) - autumn
  • 2010
Opening of current Initiative website - March
Establishment of Supervisory Board - April
Fourth Advisory Group meeting - June
  • 2011
First annual general meeting of the Initiative - Neskaupstaður Museum House, May 13
  • 2012
Review by Dr. Hörður Haraldsson
  • 2013
Austurbrú - the East Iceland Bridge - took over management of the Initiative early in the year
  • 2017
Evaluation of social indicators and procedures of the Sustainability initiative by

The Social Science Research Institute at the University of Iceland.

  • 2020
The new website opened for the Initiative - April