Iceland’s EU referendum leaves fishing and seafood sector firmly outside Brussels’ control. Iceland has voted against reopening negotiations on European Union membership, with concerns over control of its fishing resources playing a major role in the closely fought referendum.
On 29 August, 52.8% of Icelandic voters rejected the proposal to resume accession talks, compared with 47.2% who supported it. Turnout was exceptionally high at 82.6%. The Icelandic Government has confirmed that, as a result, it will not resume membership negotiations with the EU.
Although the referendum was framed around wider questions of Iceland’s economic future, security and sovereignty, fishing was one of the most sensitive issues. For an island nation whose economy, coastal communities and national identity have long been closely connected to the sea, the prospect of bringing fisheries under the EU’s Common Fisheries Policy (CFP) proved particularly contentious.
Fisheries at the heart of the debate
Iceland has spent decades defending its control over its surrounding waters. The three Cod Wars with the United Kingdom between 1958 and 1976 remain an important part of the country’s modern history and helped establish Iceland’s determination to control access to its marine resources.
That principle has continued to shape Iceland’s relationship with the EU.
Under the current arrangement, Iceland manages its fisheries independently, setting its own fishing opportunities and negotiating with other coastal states over shared stocks. EU membership would have meant participation in the CFP, under which fisheries resources are managed through common rules covering access, catch limits, quotas and conservation measures.
The precise terms would have had to be negotiated if Iceland had voted to reopen accession talks. Indeed, the fisheries chapter was never formally negotiated during Iceland’s previous accession process between 2009 and 2013. The European Commission had also stressed before the referendum that it was too early to say what special arrangements or derogations might have been agreed.
Nevertheless, uncertainty over the future management of Icelandic waters was enough to make fisheries a defining issue in the referendum.
The concern was not simply about quotas. Iceland’s fishing industry feared that EU membership could reduce the country’s ability to act independently as a coastal state and give Brussels a greater role in decisions affecting its most valuable natural resource. The issue was particularly sensitive given previous disputes over shared stocks such as mackerel.
Sverrir Haraldsson, Groundfish Division Director at Vinnslustöðin hf. / VSV Iceland, said:
“Participating in the CFP, is not something that would be favourable to Icelandic fishing companies, such as VSV. Member states with significant fisheries sectors or consumption of seafood could benefit from expanded quotas and tariff access to Icelandic fish.
“Although there were promises of future negotiations regarding quotas, these were not set in stone – Governments change.”
Sverrir also said;
“There was a marked difference in how people voted, regarding location. Rural, coastal communities voted n higher numbers to abstain from EU membership as it was much more likely to have a detrimental affect on their livelihoods, than people living in Reykjavik, who were less likely to be affected by changes in the sector”
A major seafood exporter
The importance of the issue is reflected in the scale of Iceland’s seafood industry.
According to the European Market Observatory for Fisheries and Aquaculture Products (EUMOFA), Icelandic seafood exports were worth €2.88 billion in 2025. The Icelandic fleet landed approximately 1.04 million tonnes of fish during the year, with blue whiting, cod, herring, mackerel and haddock among the leading species by volume. Cod remains particularly important in value terms, accounting for around 48% of total catch value in 2024.
Seafood is also highly dependent on international markets. The EU is Iceland’s largest export destination, accounting for 52% of seafood export volume and 54% of export value in 2025. Iceland was the EU’s third-largest supplier of fishery and aquaculture products from outside the bloc, behind Norway and China.
This creates an important paradox at the centre of Iceland’s relationship with Europe: the country wants access to the EU’s huge seafood market, but does not want to surrender control over the resources that supply it.
Iceland already enjoys extensive access to the European market through the European Economic Area (EEA). Fisheries and agriculture, however, are outside the scope of the EEA Agreement, allowing Iceland to retain its independent fisheries policy.
Tariffs and seafood processing
Supporters of EU membership had argued that closer integration could provide significant advantages for the seafood industry, particularly by removing tariffs on fish products entering the EU.
Under the existing arrangements, only around 68% of Iceland’s fish product exports enter the EU tariff-free. The Icelandic Government said fish-product tariff payments to the EU exceeded ISK 1.4 billion in both 2023 and 2024, with processed seafood products facing some of the highest tariffs. EU membership would have brought Iceland into the EU customs union and removed those tariffs.
That could potentially have encouraged more seafood processing in Iceland rather than the export of raw or semi-processed products.
The argument is particularly relevant as Iceland has increasingly invested in automation, processing technology and the utilisation of seafood by-products. Heads, skins, bones and other material that was once regarded largely as waste are increasingly being converted into products such as oils, enzymes and other higher-value ingredients.
For processors, therefore, EU membership could have offered a significant commercial opportunity: tariff-free access to the world’s largest seafood market combined with the possibility of retaining more value and employment within Iceland.
But the referendum result shows that these potential economic gains were not sufficient to outweigh concerns over sovereignty and fisheries management.
Aquaculture faces a different equation
Iceland’s rapidly expanding aquaculture industry also has a significant stake in the country’s relationship with the EU.
Aquaculture production reached 64,417 tonnes in 2025, an increase of 18% compared with the previous year. Atlantic salmon accounted for 91% of production, at approximately 58,700 tonnes, while Arctic char represented a further 8%.
Salmon farming has become an increasingly important part of Iceland’s seafood economy, particularly in the Westfjords and eastern parts of the country, while land-based and other forms of aquaculture are also developing.
For aquaculture businesses, EU membership would have presented both opportunities and challenges. Greater integration with the EU market could have simplified some aspects of trade and strengthened market access, while EU membership could also have brought Iceland more directly into the bloc’s regulatory framework for fisheries, food production, environmental protection and aquaculture.
The sector’s growth also means that aquaculture is becoming increasingly important to the wider debate about how Iceland manages its marine environment. The country’s clean waters, renewable energy resources and access to European seafood markets have helped create conditions for expansion, but development is accompanied by questions about environmental protection, disease management, escapes, coastal ecosystems and the use of marine resources.
Unlike capture fisheries, where sovereignty and quota allocation dominated the referendum debate, aquaculture would have been affected more broadly through trade, environmental and regulatory considerations.
Seafood remains closely tied to Iceland’s independence
The referendum result means that, for now, Iceland’s fishing industry will continue to operate outside the EU’s Common Fisheries Policy.
The country will retain its existing ability to manage its own fisheries and negotiate internationally as an independent coastal state. At the same time, Iceland will remain deeply integrated with the European economy through the EEA and will continue to rely heavily on the EU as a market for its seafood.
That balance is unlikely to change the fundamental importance of Europe to Icelandic seafood exporters.
The EU’s demand for cod, salmon and other Icelandic products remains considerable. In 2025, cod was the main Icelandic seafood product entering the EU market, while salmon imports from Iceland also recorded strong growth.
For Icelandic seafood companies, the referendum therefore does not represent a rejection of the European market. Rather, it represents a decision to continue trading with that market while retaining national control over the country’s fisheries.
A relationship likely to continue evolving
The referendum has settled the immediate question of whether accession negotiations should restart, but it has not removed the underlying tensions in Iceland’s relationship with the EU.
Iceland remains economically intertwined with Europe and will continue to face the same challenges as other North Atlantic fishing nations, including climate change, changing fish stocks, competition for shared resources and pressure to maximise the value of seafood production.
For the fishing industry, however, the message from the referendum is clear: control over Iceland’s marine resources remains a fundamental national priority.
For aquaculture and seafood processing, the picture is more nuanced. Businesses will continue to benefit from access to the European market while operating outside the EU’s institutional framework. At the same time, they will have to contend with tariffs on some seafood products and the commercial disadvantages that can arise from remaining outside the EU customs union.
The result ultimately preserves the model Iceland has developed over decades: independent management of its fisheries combined with close economic integration with Europe.
For the country’s seafood sector, that means the fish will continue to be managed in Icelandic waters, while much of it will continue to make its way to European consumers.
Image: Ísfélag hf.