In the Governmental agreement from November 2017 is a strong focus on climate issues, including a pledge for Iceland to become carbon neutral no later than 2040. In the agreement it is also stated that new action plan will be published, including all sectors, Climate committee will be established, and the carbon tax will be increased. The focus has been set on action and measures to enable Iceland to meet the targets of 40% reduction of greenhouse gas emission in 2030 compared to 1990 and to gain carbon neutrality no later than 2040. 4.1 Background and recent policy development