The island of Iceland lies between Norway and Greenland in the North Atlantic Ocean, just south of the Arctic Circle. In geological terms, Iceland is recent in origin. Made entirely of volcanic rock, it first pushed up above the ocean's surface between 16 and 18 million years ago. More land is still being created, at a rate of about 5 centimetres each year. Iceland is made up of mountains and volcanoes, plateaus and wide valleys. In between the mountains are long fjords and sweeping glaciers. There are very few trees; the land is mostly covered with tundra vegetation: tough grasses and moss. Despite its northerly latitude, Iceland’s climate is mild. A warm ocean current, the Gulf Stream, helps keep its winters from becoming too cold. The weather is often wet and misty at the coast.

Volcanic Iceland

Iceland lies on the Mid-Atlantic Ridge, the boundary where the Eurasian and American tectonic plates meet. It is what geologists call a divergent boundary: the plate edges spread apart from one another as magma (melted rock) pushes up from beneath the Earth's crust to fill the gap. There are around 200 volcanoes in Iceland—and a number of them are highly active.

When Eyjafjallajökull, a volcano in southern Iceland, erupted in 2010, all the surrounding farms and 600 people who lived nearby had to be evacuated. Flights all over Europe were disrupted for months by the huge cloud of ash (forced higher by the steam plumes created as glacial ice melted) it threw up.

People

Iceland is the least densely populated country in Europe. It is home to fewer than three people per square kilometre. Icelanders have a high quality of living. Two-thirds of the population lives in and around the capital, Reykjavik.

Icelanders are the modern descendants of Norsemen, or Vikings, who arrived in Iceland in the 9th century, as well as of Gaelic-speaking people from Scotland and Ireland, who were either the servants or slaves of Norse chiefs or those who had intermarried with Viking settlers.

Because Iceland has been isolated for much of its history, its ethnic make-up has remained unchanged for a long time. This means it has a “homogenous” population. As a result scientists and geneticists often study Icelanders to learn about how diseases run in families, for example.

Economy

At the end of 2008, Iceland’s three major banks collapsed and were taken over by the government. The collapse of its banking system sparked a serious economic crisis. Today, it is recovering. Most Icelanders work in services, such as education, retail, tourism and healthcare. Fishing is a very important industry: fish, such as cod, makes up around three-quarters of Iceland’s exports.

In rural areas, Icelandic farmers keep dairy cattle and sheep for their meat and wool. The growing season is very short—Iceland’s climate is best suited to hardy crops such as potatoes and turnips. Some fruits and vegetables can be grown in greenhouses; the rest of the country’s food has to be imported.

Green energy

Iceland has vast resources of renewable or “green” energy. Naturally (geothermally) heated water is used to heat most buildings in the capital, Reykjavik, and about 90% of all homes in Iceland. It is even used in underground pipes to heat the pavements and keep Reykjavik’s main squares free of ice and snow in winter.
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Iceland’s other major resource is hydro-electric power, generated by its fast-flowing rivers and waterfalls. This cheap, “green” energy has attracted manufacturing industries that use a lot of electricity to set up factories in Iceland, such as aluminium plants, because it reduces their energy costs.

Facts about Iceland

Population 383,726 (2024 estimate)

Area 100,250 sq km

Highest point Hvannadalshnúkur 2110 m (6923 ft) (Vatnajökull glacier)

Capital Reykjavik, population 139,875; Capital region pop. 247,590

Other major cities Akureyri (pop. 17,693)

Language Icelandic

Religions Christian (Lutheran) 76%, Christian (Roman Catholic) 3%, others and none 21%

Ethnicity Icelandic (Norse/Celtic) 94%, others 6%

Currency Icelandic króna (ISK)

Chief exports fish, seafood, aluminium, wool, animal feed, aircraft, medicines