In Depth: Iceland’s President Says China Can Help Scale Its Green Innovations

Iceland’s President Halla Tómasdóttir has emphasized the strategic importance of combining Iceland’s clean energy knowhow, especially in geothermal energy, with China’s ability to scale technologies and its global manufacturing capacity. This partnership, Tómasdóttir argued, holds transformative potential for the global green transition, as Iceland and China pledged to strengthen cooperation on clean energy, including expanding geothermal energy collaboration, fostering green value chains, and enhancing gender equality. Tómasdóttir’s first state visit to China, which included a meeting with President Xi Jinping and coincided with the Global Leaders’ Meeting on Women in Beijing, demonstrated Iceland’s intent to broaden bilateral ties beyond energy to also cover social and environmental issues [para. 1][para. 2][para. 3].

Tómasdóttir highlighted that Iceland, as a small country, cannot deploy its innovations at the necessary scale without collaborating with major players such as China, which she praised for its outstanding execution and commitment. These strengths, when combined, could deliver significant global impact [para. 4].

The two countries’ close relationship in geothermal development dates back 45 years to the first Chinese graduates from Iceland’s Geothermal Training Programme. Their cooperation deepened in 2006 with the creation of Sinopec Green Energy Geothermal Development Co. Ltd. (SGE), a joint venture that has brought geothermal heating to 700,000 households across more than 70 Chinese cities. SGE aims to achieve 120 million square meters of geothermal heating capacity by the end of 2025 and cumulatively reduce 25 million tons of greenhouse gas emissions [para. 5][para. 6][para. 7]. Tómasdóttir considers the joint venture a model for cross-country cooperation with real potential to export this model globally [para. 8].

Globally, geothermal energy has a limited footprint—just 16.9 GW capacity as of 2024, compared to 2,200 GW of installed solar, supplying about 1% of global energy due to high costs and location constraints. However, geothermal offers stable, 24-hour power, making it attractive alongside wind and solar. Iceland, thanks to strong government support since the 1920s, meets 90% of its heating demand through geothermal resources [para. 9][para. 10][para. 11]. Tómasdóttir argued that geothermal energy is the “missing piece” for a complete green transition, especially while battery technology lags [para. 12]. Iceland and China are also venturing into carbon capture—the Icelandic firm Carbon Recycling International operates two carbon-to-methanol plants in China—and exploring sustainable materials from seaweed and algae [para. 13][para. 14][para. 15][para. 16].

China is Iceland’s largest Asian trading partner, with $443 million in bilateral trade in 2024; Iceland mainly exports fishery products and imports textiles, coke, and ships. The two countries signed a free trade agreement in 2013, the first between China and a European state [para. 17].

Tómasdóttir, Iceland’s second female president, is recognized globally for her advocacy of gender equality and responsible leadership—balancing economic, social, and environmental priorities. She has long argued that full societal potential can only be unlocked with true gender inclusion and has built her career around these principles [para. 18][para. 19][para. 20][para. 21][para. 22][para. 23].

The partnership extends into geopolitics. China’s recent opening of an Arctic shipping route to the UK via Iceland highlights Iceland’s strategic location. While Tómasdóttir says it’s early to discuss joint Arctic logistics efforts, she recognizes the growing interest from China and the rest of the world. She also underscores Iceland’s commitment to a rule-based international order amid rising tensions and speculative discussions about U.S. (under President Trump) and EU involvement in the Arctic. Any decision on Iceland’s EU dialogue, she stresses, will be left to Iceland’s people in a national referendum [para. 24][para. 25][para. 26][para. 27][para. 28][para. 29][para. 30][para. 31].