Navigating Troubled Waters: A Strategic Analysis of the Fishing Industry in Greenland, Iceland, and the Faroe Islands

A Region at a Crossroads of Science and Politics

The fishing industry in Greenland, Iceland, and the Faroe Islands enters the second half of 2026 at a critical juncture. Iceland's capelin boom provides short-term economic relief, but the broader pelagic sector faces profound challenges from unresolved quota disputes, scientific advice calling for drastic reductions, and mounting pressure from global seafood markets.

The fishing industry across Greenland, Iceland, and the Faroe Islands enters the second half of 2026 in a state of profound tension. Unresolved coastal state disputes, sharply contrasting stock trajectories, and mounting pressure from global seafood markets have created an environment of unprecedented uncertainty. While Iceland celebrates an 81% surge in its capelin quota, the broader pelagic sector is grappling with scientific advice calling for drastic reductions in mackerel and blue whiting catches. Greenland faces deep concern over potential shrimp stock collapse, and the Faroe Islands are navigating conservation-driven cuts across multiple demersal and pelagic species. As of June 27, 2026, the industry is characterized by a complex web of unilateral quota setting, reciprocal access treaties, and intensifying calls from the marketplace for sustainable, science-aligned management. This report provides a comprehensive analysis of the current status, key developments, and future outlook for the fishing industry in these three North Atlantic nations.

Greenland: Pelagic Alignment and Deep Concern for Shrimp

Mackerel and Herring: Following the Four-Party Framework

In a significant policy decision on April 10, 2026, Greenland's Naalakkersuisut (government) set the country's 2026 mackerel quota at 19,435 tonnes and herring quota at 25,000 tonnes. The mackerel quota may be fished in East Greenland and the international zone, while the herring quota is restricted to East Greenland waters. This decision aligned Greenland with the framework established by the United Kingdom, Norway, the Faroe Islands, and Iceland, who reached a partial mackerel sharing agreement on December 16, 2025, setting a collective Total Allowable Catch (TAC) of 299,010 tonnes for 2026—a 48% reduction compared to 2025 levels.

The coastal states' decision represents a significant divergence from the scientific advice provided by the International Council for the Exploration of the Sea (ICES). In October 2025, ICES advised that mackerel catches should be reduced by 77% compared to the previous year, setting a total catch limit of no more than 174,357 tonnes to facilitate stock recovery. The stock biomass has fallen below critical thresholds, with scientists warning that failure to adhere to the advice may lead to a lower chance of stock recovery.

The partial agreement has drawn sharp criticism from the European Union and its fishing industry. The EU, which was excluded from the four-party arrangement, has expressed deep concern that the agreement rewards unilateral setting of excessive quotas by non-EU countries in recent years while disregarding the legitimate interests of the EU and its fishers. The collective share of the four parties now totals 79.45% of the mackerel TAC, leaving insufficient space to accommodate the EU claim based on historical, sustainable track records. The EU industry has called on the EU to act against "institutionalised overfishing" and help broker a fair comprehensive agreement between all coastal states.

For Greenland specifically, the mackerel quota allocation of 19,435 tonnes represents a significant reduction from previous years and reflects the broader acknowledgment of the stock's precarious state. The country's herring quota of 25,000 tonnes, by contrast, was set against a more positive scientific backdrop, with ICES recommending a 32% increase for herring compared to 2025, to a total of 533,914 tonnes.

Shrimp: Warning Signs of Potential Collapse

Beyond the pelagic sector, deep concern remains for the East Greenland shrimp stock, with scientists warning of a potential stock collapse leading to advice for drastic cutbacks to preserve biomass. The situation has prompted Greenland to enact a new management framework for West Greenland shrimp lasting through 2030, tying all future quotas strictly to scientific advice. This precautionary approach reflects the territory's commitment to long-term sustainability in the face of growing environmental pressures and shifting climate patterns affecting Arctic marine ecosystems.

Halibut, Cod, and Demersal Fisheries

Greenland has adopted a strict long-term management plan (2026–2030) for the West Greenland offshore halibut fishery. The offshore cod TAC for West Greenland was set at 16,000 tonnes, defying lower scientific recommendations, while Barents Sea allocations were scaled back to 2,920 tonnes of cod and 533 tonnes of haddock. These decisions reflect the ongoing tension between short-term economic considerations and long-term sustainability imperatives that characterize fisheries management across the region.

International Agreements and Quota Swaps

Greenland's fishing industry is heavily dependent on pelagic exports and bottom fish, with quota allocations tightly aligned with sustainability efforts. The country has participated in quota-swapping agreements with Norway, though cod allocations have seen downward adjustments. In the broader context of unresolved coastal state disputes, Greenland has also engaged in reciprocal access arrangements with the Faroe Islands, guaranteeing Greenland access to Faroese waters for blue whiting and Atlanto-Scandian herring.

Iceland: Capelin Boom Amid Pelagic Uncertainty

Capelin: An 81% Surge

The most significant positive development in the Icelandic fishing industry in 2026 is the extraordinary surge in the capelin quota. Scientists have recommended an interim 2026/2027 capelin quota of 358,044 tonnes, representing an 81% increase reflecting high juvenile counts. This boom has driven the fishery's value to approximately €480 million, bringing substantial economic relief and offsetting raw material shortages for the EU fishmeal industry. The capelin surge is particularly beneficial for both the domestic fleet and international demand for fishmeal raw material, providing a bright spot in an otherwise challenging fisheries landscape.

Herring and Mackerel: Mixed Signals

Iceland's summer-spawning herring fishery faces tighter limitations, with ICES recommending a catch limit of 80,307 tonnes, citing downward revisions in biomass estimates. The advised TAC for Icelandic summer-spawning herring is set at 103,367 tonnes for the season. In the mackerel fishery, Iceland has participated in the 2026 multilateral agreement alongside the UK, Norway, and the Faroe Islands, claiming a 10.5% share of the TAC. Under the four-party arrangement, Iceland's net share of the mackerel TAC was set at 10.50%.

Access Arrangements with the Faroe Islands

In a significant bilateral development, Iceland and the Faroe Islands established reciprocal access protocols for 2026. Under the agreed record signed on December 15, 2025, the Faroe Islands granted Iceland access to Faroese waters to fish 9,419 tonnes of mackerel. The number of Icelandic vessels permitted to fish mackerel in Faroese waters at the same time is 12, with the Faroe Islands reserving the right to further limit the number of vessels to prevent congestion on the fishing grounds. The arrangements are set to apply for 2027 and 2028 as well, with access provided at the same relative proportion of the Icelandic national quota after transfers.

Additionally, coastal states mutually agreed that up to 15 Icelandic vessels can continue fishing blue whiting in Faroese waters. These access arrangements are crucial for maintaining fleet viability amid tightened biological thresholds and demonstrate the continued importance of reciprocal licensing and quota swaps among regional nations.

Demersal Stocks: Harvest Control Rules

Iceland's cod and saithe quotas remain strictly governed by Harvest Control Rules (HCR), reflecting the country's commitment to science-based management for demersal species. This approach has contributed to Iceland's continued outperformance in managing chronic fishery challenges and maintaining stock sustainability.

The Blue Whiting Challenge

The blue whiting stock presents a particularly complex management challenge for Iceland. In October 2025, coastal state delegations from the EU, Faroe Islands, Iceland, Norway, and the UK met in London to consult on blue whiting management for 2026, with Greenland attending as an observer. The delegations agreed that total catches for blue whiting in the North-East Atlantic for 2026 should be no more than 851,344 tonnes as advised by ICES. The parties established a long-term management strategy consistent with the precautionary approach and the MSY approach, aiming to ensure harvest rates within safe biological limits.

However, the 2026 agreement was marked by the acceptance that unilateral quotas would be established, with the delegations agreeing that this "does not in any way imply the acceptance of the level of these quotas by any Party." This language reflects the ongoing tensions and lack of consensus that continue to plague pelagic fisheries management in the region.

The Faroe Islands: Conservation-Driven Reductions and Diversification

Pelagic Challenges: Sharp Cuts for Blue Whiting and Mackerel

The Faroese fishing sector is operating under significant conservation-driven reductions in fishing pressure across multiple pelagic and demersal stocks. The blue whiting fishery faces a 41% recommended reduction, while mackerel allowances have been subject to major cuts under the four-party agreement. As a party to the mackerel agreement, the Faroe Islands secured a 12% net share of the 299,010-tonne TAC. The Faroese delegation, headed by Ingibjørg Tummassardóttir Petersen, participated in the consultations alongside Norway, the UK, and Iceland, with the Faroese Minister of Fisheries expressing hope that other coastal states, including the EU and Greenland, would eventually join the agreement.

The Faroe Islands have also implemented quota reductions for shared pelagic stocks like blue whiting, aligning with scientific advice. Updated 2026 fishing arrangements with Greenland confirmed mutual access for blue whiting and Norwegian spring-spawning herring, despite biological reductions in the blue whiting TAC.

Demersal Management: A 5% Fishing Day Reduction

Faroese fisheries scientists have advised a 5% cut in fishing days for vessels targeting cod, haddock, and saithe, citing uneven stock recovery. This precautionary approach reflects the Faroe Islands' commitment to long-term sustainability and aligns with broader Nordic trends emphasizing conservation-driven management. The Faroese have also secured a bilateral agreement for 6,306 tonnes of cod in Russian waters, though this represents a drop from previous years.

Bilateral Agreements and Quota Exchanges

The Faroe Islands have signed reciprocal quota exchanges for 2026 with the UK, Norway, and Russia. The 2025 Agreed Record with the UK, signed on December 19, 2025, exchanged 23 tonnes of North-East Atlantic mackerel and 60 tonnes of North Sea Autumn Spawning Herring, while a subsequent agreement on December 22, 2025, covered a broader range of species.

The December 22 agreement specified transfers of UK stocks to the Faroe Islands including 900 tonnes of Greenland Halibut, 90 tonnes of bycatch stock, 40 tonnes of cod (NAFO 3L), 20 tonnes of haddock, 30 tonnes of ling, and smaller allocations of other species. In return, the UK received transfers of Faroese stocks including 850 tonnes of cod and haddock, 600 tonnes of saithe, 80 tonnes of blue ling, and 80 tonnes of ling, alongside other species. These exchanges are critical for maintaining fleet viability and ensuring access to a diversified portfolio of fishing opportunities.

Market Diversification: Asian Engagement

Looking beyond European borders to diversify, Faroese operators held the 2026 Seafood Business Matching Day in Busan, South Korea, to build Asian trade relationships. This strategic move reflects the Faroe Islands' recognition that reliance on traditional European markets may be insufficient in an era of quota cuts and market uncertainty.

The Broader Context: Market Pressure and Political Deadlock

The North Atlantic Pelagic Advocacy Group (NAPA)

The unresolved political deadlock over pelagic quota sharing has triggered a significant market response. The North Atlantic Pelagic Advocacy Group (NAPA), a global coalition of over 50 retailers, foodservice companies, and supply-chain businesses committed to sustainable seafood sourcing, has been at the forefront of pressure on coastal states.

NAPA launched its Fishery Improvement Projects (FIPs) in 2021 to drive consensus among fishery managers on mackerel, blue whiting, and Atlanto-Scandian herring. Originally set to conclude in 2024, the FIPs were extended to 2026, providing a narrow final opportunity for coastal states to secure equitable sharing agreements. The coalition has been clear: without credible efforts to improve these fisheries, it remains challenging for retailers and supply-chain businesses to continue sourcing from the North-East Atlantic.

Market Consequences

The market consequences of political inaction are becoming increasingly visible. In a significant development, UK supermarket Waitrose announced it would halt sourcing of North East Atlantic mackerel amid escalating and unresolved sustainability concerns. This decision follows actions taken by other NAPA partners, including Princes, Thai Union, Albert Heijn, Jumbo, and Lidl Netherlands.

NAPA's Executive Chair, Aoife Martin, stated: "The market is clear: healthy fisheries are essential for sustainable businesses. If the supply chain cannot rely on a long-term future for North East Atlantic fisheries, they will look elsewhere, and indeed this is what we're now seeing." The consequences for supply-chain businesses, coastal communities, and the people whose livelihoods depend on these fisheries are profound.

The Science-Policy Gap

The gap between scientific advice and political decision-making has widened dramatically. ICES data shows that over the past 15 years, the sum of unilateral quotas for mackerel has resulted in catches exceeding scientific advice by an average of 39%. The 2025 advice recommending a 77% cut in mackerel catches, combined with a 41% reduction in blue whiting, highlights how far management has strayed from the science.

The mackerel stock is now below safe biological limits, and scientists warn that failure to adhere to the advice may lead to a lower chance of stock recovery. This situation has been exacerbated by the suspension of MSC certification for these fisheries in 2019 and 2020, further eroding market confidence.

Beyond 2026: Industry Outlook

Long-term forecasts across all three nations hinge on resolving broader coastal state disputes. Without centralized, long-term multilateral quota-sharing agreements, the industry faces ongoing tensions, market volatility, and pressure to adapt to climate-driven shifts in fish migration. The 2026 Strait of Hormuz crisis and associated energy market volatility have added another layer of complexity, increasing operating costs for fishing fleets and exposing the vulnerability of oil-dependent island economies.

The Faroe Islands hold a joint presidency with Denmark over the Nordic Council of Ministers, with key priorities including energy security and accelerating the green transition. This leadership position provides an opportunity to advance regional cooperation on fisheries management alongside broader energy and sustainability agendas.

For the fishing industry specifically, key priorities moving forward include: reaching a comprehensive quota-sharing agreement for mackerel that includes all coastal states; aligning total catches across all species with scientific advice; maintaining and strengthening reciprocal access arrangements to ensure fleet viability; and diversifying markets to reduce dependence on traditional European buyers.

Conclusion

The fishing industry in Greenland, Iceland, and the Faroe Islands enters the second half of 2026 at a critical juncture. Iceland's capelin boom provides short-term economic relief, but the broader pelagic sector faces profound challenges from unresolved quota disputes, scientific advice calling for drastic reductions, and mounting pressure from global seafood markets. Greenland's shrimp stocks are at risk of collapse, while the Faroe Islands navigate conservation-driven cuts across multiple species. The failure of coastal states to reach comprehensive, science-aligned quota-sharing agreements has led to market consequences that threaten the long-term viability of these fisheries. The next round of coastal state negotiations will be decisive in determining whether the region can secure a sustainable future for its fishing industry and the communities that depend on it.

Sources: Agreed Record of Conclusions of Fisheries Consultations between the European Union, the Faroe Islands, Iceland, Norway and the United Kingdom on the Management of Blue Whiting in the North-East Atlantic in 2026. (2025, October 23). London - Grønlands Fiskerilicenskontrol. (2026, April 29). The 2026 TAC for mackerel and herring has been set. Greenland Fisheries and Hunting Control - Europeche. (2025, December). Four-party mackerel agreement sidelines EU, rewards overfishing and creates unlevel playing field - WeAreAquaculture. (2025, December 18). Norway, UK, Iceland and Faroe Islands agree to a 48% reduction in mackerel quota - Agreed Record of Fisheries Consultations between the Faroe Islands and Iceland on the Management of Mackerel in the North-East Atlantic. (2025, December 15) - Fish Focus. (2026, March). NAPA calls for urgent reform in wake of Waitrose mackerel sourcing decision - Undercurrent News. (2024, October 16). Pelagics action group pushes FIP deadline back to 2026 - Fish Focus. (2024, October 15). NAPA's renewed call for action amid critical coastal states negotiations - Marine Stewardship Council. (2025, October). North East Atlantic Pelagic Quota Sharing Agreement in Urgent Need - Marine Stewardship Council. (2025). Small pelagic fish: Overexploitation in the North East Atlantic - Agreed Record of Fisheries Consultations between the Faroe Islands and the United Kingdom for 2026 – Mackerel and Herring. (2025, December 19) - Agreed Record of Fisheries Consultations between the Faroe Islands and the United Kingdom for 2026 – Demersal Stocks. (2025, December 22) - ICES. (2025). Working Group on Widely Distributed Stocks (WGWIDE) Report. Read reports & Insights here

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