To ensure sustainable funding for the construction and maintenance of safe and efficient roads across the country into the future.

• The old system is outdated and cannot provide adequate funding for the road network in the long term. It assumes that all vehicles run on petrol or diesel and consume significant fuel. It has not adapted to the growing number of fuel-efficient vehicles and will become obsolete with the energy transition.
• In 2023, road usage charges (fuel taxes and the general per-kilometer charge on trucks) yielded only 7 ISK per kilometer driven — a 43% drop from 2006, when they provided 12.2 ISK/km.
• The new system will stabilize government revenue from road usage charges, ensuring a predictable and future-proof funding model.

Paying for road usage: The per-kilometer charge replaces petrol and diesel taxes, which will be removed.

• Road usage will now be measured by kilometers driven rather than fuel consumption.
• All vehicles in the same weight category will pay the same rate, regardless of energy source.
• The per-kilometer charge will be paid monthly, based on usage calculated from an annual odometer reading submitted via Ísland.is or during a vehicle inspection.
• Pump prices for diesel and petrol will decrease as fuel taxes are removed.

Paying for CO₂ emissions: The carbon tax will be updated.

• It provides incentives for the energy transition by ensuring that driving a zero-emission vehicle will always be the most affordable option.
• It also encourages the use of more fuel-efficient vehicles.
• The updated carbon tax will be aligned with international carbon pricing.
• It will remain part of the pump price for petrol and diesel.

No, this is a structural change designed to keep government charges for the average petrol car at the same level as in 2024.

• The 6.7 ISK per-kilometer rate is based on the assumption that public charges for the average petrol vehicle will remain unchanged in the new system in 2025 compared to the old system in 2024.
• All vehicles within the same weight class will pay the same rate per kilometer. In the old system, vehicles were charged differently based on fuel consumption. As a result, costs will decrease for some and increase for others, but on average they will stay the same.

Drivers in rural areas will, on average, pay less under the new system than they did under the old one for the same amount of driving.

• Vehicles in rural areas are generally larger and less fuel-efficient, likely due to more demanding driving conditions compared to the capital region.
• In the old system, higher fuel consumption meant higher taxes, disproportionately affecting rural drivers who often rely on larger vehicles.
• The new system corrects this by applying the same per-kilometer rate to all vehicles in the same weight category, regardless of efficiency. As a result, areas where less fuel-efficient vehicles are more common will generally see lower costs.
• The actual effect for each individual still depends on how fuel-efficient their vehicle is and how much they drive.
  

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Lower-income groups will, on average, pay less under the new system than they did under the old one for the same amount of driving.

• Lower-income individuals are generally more likely to drive older and less fuel-efficient vehicles.
• In the old system, these vehicles incurred higher fuel taxes due to higher consumption, leading to greater road usage charges.
• The new system corrects this by applying the same per-kilometer rate to all vehicles within the same weight category, regardless of age or efficiency. As a result, those driving older, less efficient cars will generally see reduced costs.
• However, the actual effect for each person still depends on their vehicle’s fuel consumption and how much they drive.

Yes, the per-kilometer charge is structured across 29 weight categories. Heavy transport trucks weighing up to 49 tons pay the highest rate, while family cars under 3.5 tons pay the lowest.

• The rate for passenger cars is 6.7 ISK per kilometer, whereas the heaviest vehicles can pay up to 70.29 ISK per kilometer.
• The structure aims to reflect the actual cost of building and maintaining roads in proportion to the total vehicle weight, while also keeping the system simple (cf. image below).
• The rate includes a fixed base cost that is distributed fairly evenly among all vehicles regardless of weight, and a variable cost that reflects road wear and tear, which then rises proportionally according to vehicle weight by a factor of four (cf. image below).
• As a result, there's only a small difference in the road wear caused by a 2-ton passenger car versus a 3-ton one. In contrast, a 20-ton vehicle causes significantly more wear and therefore incurs much higher costs.
• Vehicles commonly used by the general public to get around are typically under 3.5 tons. These are the lightest vehicles on the road and will pay the lowest per-kilometer charge.
• Heavy vehicles, ranging from 3.5 tons up to 49 tons in total weight, pay a progressively higher per-kilometer charge based on weight categories. This includes everything from large American pickup trucks to buses and articulated freight trucks.

Yes, it incentivizes and moves the energy transition forward by ensuring that the operating cost of electric vehicles remains the lowest.

• The basic operating cost of an electric car will be 14,000 ISK lower per month (168,000 ISK annually) than that of a comparable petrol vehicle.
• Diesel and petrol vehicles will pay the updated carbon tax.
• The lower cost of owning and operating an electric vehicle is due to exemption from the carbon tax, reduced vehicle tax, lower VAT, and the fact that electricity is a much cheaper energy source than petrol.

The per-kilometer charge is paid monthly, in a similar manner to electricity or other utility bills.

• It is calculated based on kilometers driven, as recorded through odometer readings.

The odometer reading must be submitted once per year. This can be done during the vehicle’s annual inspection or online at island.is.

• On island.is, it is also possible to view a vehicle’s driving history and update the odometer reading every 30 days for more precise tracking of road usage.

Yes, pump prices will decrease overall.

• Fuel taxes on petrol and diesel will be eliminated, and pump prices will drop accordingly.
• However, the updated carbon tax will be higher and will partly offset that decrease.
• The exact reduction in price will depend on the proportion of environmentally friendly fuel additives. These additives have not previously been subject to fuel or carbon taxes, so their share of each liter will also affect the final price change.

Yes, motorcycles will be subject to the per-kilometer charge, but at a reduced rate. The rate for motorcycles will be 40% lower than that for passenger cars, or ISK 4 per kilometer.

The rates are calculated via 29 weight categories, with the charge increasing as the total vehicle weight increases.

• For freight trucks with trailers, charges are applied separately to the total weight of the truck and the total weight of the trailer.

Yes, all vehicles using Icelandic roads will be subject to the per-kilometer charge.

• Car rental companies will be responsible for paying the charge based on odometer readings or a daily rental rate.
• Tourists bringing their own vehicles to Iceland will pay a fixed road usage fee for the duration of their stay.

No, you will not have to pay the per-kilometer charge for driving done outside of Iceland.

• You must provide evidence that the vehicle was used abroad, such as booking confirmations or transport documents.
• You will also need to record the vehicle’s odometer reading both at departure and return, and request a deduction from the Icelandic tax authorities (Skatturinn) for the distance driven abroad.

No, agricultural equipment and construction machinery that are primarily used off public roads are not subject to the per-kilometer charge.

• Only vehicles that are both registration- and inspection-obligated must pay the charge.
• The following types of vehicles are exempt from inspection requirements and therefore also exempt from the per-kilometer charge: Tractors designed for speeds of 40 km/h or less; Tractors designed for speeds over 40 km/h that are primarily used off public roads; Off-road vehicles; Construction machinery; Tractor trailers (R1, R2, R3, and R4) designed for speeds of 40 km/h or less, and trailers that are almost exclusively used off public roads; Vehicles that have been deregistered or taken off the road; Electric tow tractors.

There will be no per-kilometer charge for trailers under 3.5 tons.

• There will be no per-kilometer charge for trailers under 3.5 tons. This means that most camper trailers, folding campers, caravans, and small utility trailers used by the general public are exempt.

The per-kilometer charge for heavy trailers will be introduced in phases.

• For trailers weighing between 3.5 and 10 tons, no charge will apply in 2025. In 2026, 80% of the full rate will apply, and from 2027 onward, the full rate will be charged.
• For trailers weighing 10 tons or more, a 60% charge will apply in 2025, 80% in 2026, and the full rate starting in 2027.
• The per-kilometer charge for trailers follows the same rate structure and is based on total trailer weight. For vehicle-trailer combinations, the total charge will be the sum of the towing vehicle’s charge and the trailer’s charge.

Yes, under current law, odometers are to be used for measuring vehicle mileage and applying charges accordingly.

• For standard passenger cars, the odometer must be functional. Compliance is checked during vehicle registration and inspections.
• For heavy vehicles, the per-kilometer charge will be based on a certified and functioning odometer (tachograph).

Yes, pump prices will decrease overall.

• Fuel taxes on petrol and diesel will be eliminated, and pump prices will drop accordingly.
• The updated carbon tax will be higher, which will slightly offset the reduction.
• The size of the reduction depends on the proportion of renewable additives in the fuel sold by each supplier, since those components have not previously been subject to fuel taxes.
• For petrol, the price reduction will range from around 95 to 105 ISK per liter, depending on whether the blend includes 0% to 10% renewable content.
• For diesel, the reduction will range from about 80 to 88 ISK per liter under the same conditions.