Five opportunities for Iceland
in the EU’s new Arctic strategy
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The European Union’s new Arctic strategy holds opportunities for Iceland. The strategy strikes a firmer tone than before on the importance of the Arctic to the EU. It places strong emphasis on cooperation with states outside the Union, Iceland among them, to strengthen shared defence, build infrastructure and establish a more structured cooperation among like-minded partners in Europe’s “Northern Neighbourhood”.
Five opportunities
Iceland should seek a role in establishing the Northern Neighbourhood and could offer to host its first summit.
Iceland should offer to host part of the EU’s Maritime Security Hub and thereby strengthen the Coast Guard’s capacity to gather information on the waters around Iceland.
While feasibility studies are under way, the government should explore whether Iceland can be connected to the EU’s new submarine cable to Greenland, and Iceland could host the Arctic Cable Hub or part of it.
The government should aim to have infrastructure supporting EU space systems built in Iceland.
The government should review the decision not to take part in the European Defence Fund and open talks on participation.
Ursula von der Leyen, President of the European Commission, announced a review of the Union’s Arctic policy when she visited Iceland in July 2025. The new strategy was presented on 20 October 2026, five years after the previous update. It rests on a transformed international situation, not least in the Arctic: Russian aggression; China’s growing interest and activity; and escalating climate change which is opening new shipping routes. The strategy does not specifically mention the dispute over Greenland between the United States, Denmark and Greenland, although it is clear that the US President’s conduct has sharpened the EU’s position. In 2021 the goal was a peaceful, sustainable and prosperous Arctic. Security and defence are now at the forefront.
Opportunities for Iceland
Most of the measures in the EU’s new strategy are still at an early stage. The Icelandic government can therefore influence how they take shape if it engages proactively and timely. Iceland has an interest in attracting investment in infrastructure, strengthening defence and deepening cooperation with the EU. Iceland’s strength lies in its ability to move quickly when the will is in place. The government should use that strength to seize the following five opportunities the strategy opens up. Such deeper cooperation will further complement Iceland’s active participation in other important Arctic forums, such as the Arctic Council.
1. A seat at the Northern Neighbourhood table
When a group of leaders of EU member states met at the European Arctic Summit in Rovaniemi, Finland, on 13–14 September, the prime ministers of Iceland and Norway attended only a working dinner the day before the summit itself began. The new strategy builds on the Rovaniemi summit and announces regular summits of EU member states and like-minded partners. The Northern Neighbourhood would be a political framework for more structured cooperation among these countries. The strategy names Greenland, the Faroe Islands, Norway, Iceland, the United Kingdom, Canada and the United States as possible partners within the framework. Beyond these, the EU intends to work with other states such as Japan and South Korea. Iceland should seek a role in establishing this forum.
Iceland could also invite more active participation and strengthen its position by following Norway’s example and establishing a dedicated bilateral dialogue with the EU on the Arctic. Norway did so in 2026. With Iceland, Arctic matters are still discussed within general frameworks of cooperation, such as the Security and Defence Partnership concluded in March 2026. Iceland could also offer to host the first Northern Neighbourhood summit.
2. Offer to host part of the Maritime Security Hub
The EU intends to set up a Maritime Security Hub together with interested member states and partner states. Its role will be to integrate information from seabed to space, including on search and rescue, the security of submarine cables and their landing points, the movements of Russia’s shadow fleet, illegal fishing and pollution. A complete picture of the North Atlantic is impossible without cooperation with Iceland. The Icelandic Coast Guard (Landhelgisgæsla Íslands) monitors 752,000 km² of ocean and directs search and rescue across some 1.9 million km², an area more than twice the size of Iceland’s exclusive economic zone.
Member states will lead its implementation, and partner states can take part. Iceland should offer to host part of the hub and thereby strengthen the Coast Guard’s capacity to gather information on the waters around Iceland. The government should prioritise such projects and investments so that they serve both the EU and Iceland’s role in NATO.
3. Secure involvement in the new submarine cable and the Arctic Cable Hub
The EU intends to connect Greenland directly to Europe by laying a new submarine cable. It is meant to be the first leg of a wider network that will link Europe to Japan and South Korea via Greenland and Canada. While feasibility studies on the route are under way, the Icelandic government should explore whether Iceland can be connected to the cable. Korda (formerly Farice) is now preparing its next cables, and cooperation with Greenland and the EU could open opportunities.
The first step in building the Maritime Security Hub will be the Arctic Cable Hub. Its role is to monitor and protect submarine cables in the North Atlantic and the Arctic and support their repair, modelled on similar operations in the Baltic Sea and the Mediterranean. As with the Maritime Security Hub, Iceland could host this function, or at least part of it. The strategy states that the EU will support member states and interested EEA states in setting up the hub.
4. Build European satellite infrastructure in Iceland
Iceland joined IRIS², the EU’s secure satellite communications system, through an agreement signed on 26 March 2026. According to the strategy, the EU intends to add satellites so that the system covers the Arctic, in cooperation with member states and third countries. The strategy also states that the EU relies on the Arctic to strengthen the resilience of its space systems, including through ground infrastructure.
Under the IRIS² regulation, ground infrastructure can be located in EEA states where it cannot be located within EU member states. The government should aim to have infrastructure supporting EU space systems built in Iceland. Such infrastructure will strengthen the communications security of Iceland and Europe and give Iceland greater weight in Europe’s shared security.
5. Participation in the European Defence Fund
Unlike Norway, Iceland is outside the European Defence Fund (EDF). The fund currently supports ten projects related to Arctic defence, worth around €260 million. These include the development of an aircraft for extreme conditions and of over-the-horizon surveillance equipment. As in other EU programmes in which Iceland takes part under the EEA Agreement, participating states contribute in proportion to GDP and in return gain access to grants. The government should review the decision not to take part in the EDF and open talks on participation.
Iceland’s contribution
Three Arctic states are EU members, and two others, Iceland and Norway, are close partners. The Union’s interests in the Arctic are therefore substantial. The strategy states: “Multilateral cooperation remains indispensable, but it can no longer be the sole foundation of the European Union’s Arctic approach. In short, the Arctic is close, connected and critical to our future.” The strategy’s emphasis on security and cooperation, complementing NATO’s work, aligns with Iceland’s interests.
If Iceland wants to seize these opportunities, it must pursue them in earnest and invest in the capabilities they require. Goodwill and geography are not enough on their own to ensure security and resilience. States have to contribute their share. Iceland is a sovereign state outside the EU and cannot expect a free ride. Its interests demand initiative and a willingness to act. Ministries and agencies should therefore join forces and bring in companies from the relevant sectors where appropriate.
Translated from the Icelandic original — read it here.