Suðurnesjabær

Suðurnesjabær is Iceland's newest municipality—created in 2018 by merging Sandgerði and Garður on the Reykjanes Peninsula. This administrative fusion reflects a broader pattern: small communities combining to achieve economies of scale in governance. But the merger's true significance lies in positioning: Suðurnesjabær sits adjacent to Keflavík International Airport, Iceland's gateway to the world.

The K64 Masterplan, launched in 2023, envisions transforming this airport-adjacent zone into a diversified economic hub by 2050. Kadeco coordinates between the Icelandic state, airport operator Isavia, and the municipalities of Reykjanesbær and Suðurnesjabær. The vision exploits three resources: renewable geothermal/hydro energy, proximity to international air routes, and a young, diverse workforce shaped by immigration.

Historically, Suðurnesjabær's communities relied on fishing—Sandgerði and Garður maintained their own fleets and processing facilities. The U.S. Naval Air Station at Keflavík provided alternative employment until closure in 2006. Now the economy pivots toward airport-adjacent industries: logistics, light manufacturing, services for transit passengers.

The Reykjanes volcanic system adds geological volatility. Eruptions in 2021-2024 and continued seismic activity through 2025 remind residents that they inhabit active rift zone terrain. Yet tourism remains robust—visitors come precisely because they can witness geological forces reshaping the landscape. The biological metaphor is apt: Suðurnesjabær exists on an edge, where tectonic plates diverge and economic strategies must accommodate both opportunity and instability.