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Progress

Figure 1 shows economic benefits that Alcoa Fjarðaál creates in Iceland in ISK. The numbers reflect simple calculation on East Iceland's gain due to Alcoa and Landsvirkjun. Economic status, increased productivity of workforce, required rate of return, energy and aluminum prizes or status of economic system are not taken in to account. In reality, the numbers reflect capital the companies put into the economic system, irrespective of its state.

Sustainability.is

Figure 1. Economic benefits in Iceland due to Alcoa Fjarðaál and Fljótsdalsstöð (millions of ISK).

Updated: May 14, 2020
Source: Landsvirkjun (2020) og Alcoa Fjarðaál (2020)

Metrics, Targets and Monitoring Protocol

What is measured?

Economic benefits, in ISK, that Fjarðaál and Landsvirkjun create domestically through the projects by salaries, payments to public authorities and supplies procured in Iceland (Project effects: direct)

Monitoring Protocol

Financial departments of Landsvirkjun and Fjarðaál in cooperation with an independent consultant collect information annually.

Target

Results depend on several macro factors that companies can not influence and targets are therefore not set.

Possible countermeasures

Not applicable, monitoring only.

Changes of indicator

This indicator was initially called „Retained value added“ and the metric: „ISK retained in Iceland through Alcoa and Landsvirkjun salaries, payments to public authorities, supplies procured in Iceland and profits that remain in Iceland„ During data collection for the year 2005, which is the first year in Phase 4 the name was changed to „Economic benefits“ and the metric to „Economic benefits in ISK, that Fjarðaál and Landsvirkjun create domestically through the projects by salaries, payments to public authorities and supplies procured in Iceland“. The reason was that is was not considered realistic to provide information about profits that stay domestically and are specifically tied to the projects. The indicator and metric was changed accordingly.


This indicator was originally number 14.1. It was then named Retained Value Added and can be found under that number in documents of the project from 2005 and 2006.

The indicator number has been changed twice.

Table 1. Changes to name and number of indicator
Year Nr. Indicator name
2020 4.3.2 Economic benefits
2007 3.3 Economic Benefits

Baseline

Table 2. Economic gain created by the operations of Alcoa Fjarðaál and Fljótsdalsstöð in Iceland in 2007 and 2008
  Alcoa Fjarðaál (million ISK) Fljótsdalsstöð (million ISK)
2007 5.000 113
2008 30.000 287

Rationale for Indicator Selection

Long-term economic benefits from the projects are important for sustainability. This does not only apply to economic benefits for the private companies involved in the projects, but also for East Iceland and for Iceland as a whole. The economic benefits added from the smelter and dam will include salaries, payments to public authorities, supplies procured in Iceland and profits that remain in Iceland.

From phase I/II report on indicators and baseline from April 2005