Studies in the early 1990s indicated that the production and use of alternative fuels is not economically viable. The situation may be somehow different today mainly due to the progress in fuel cell technology, but many innovations and improvements are still needed before hydrogen or other alternative fuels can replace oil in the energy system. During the past few years the discussion in Iceland on alternative fuels has mainly revolved around hydrogen as an energy carrier. In 1999 VistOrka, an Icelandic private company, together with DaimlerChrysler, Norsk Hydro Produksjon and Shell International, signed a joint venture agreement on co-operation in this area. One possible approach towards this goal is production of environmentally friendly fuels for powering vehicles and fishing vessels.
Liquid hydrogen is an example of such a fuel.
The establishment of a company owned by Icelandic parties and several international corporate leaders in the field of hydrogen fuel technology could open up new opportunities in this field. The Government of Iceland welcomes the establishment of this company by these parties and considers that the choice of location for this project is an acknowledgement of Iceland's distinctive status and long-term potential. The initiative taken by the parties involved in this project deserves to be applauded and respected.