Big discounts attract international shoots to Iceland as production grapples with active volcanoes

In the middle of a lava field on the southern peninsula of Iceland, the Lights crew prepares the next shot. At the film village, producer Grimar Jonsson and other crew members take a coffee and pastry break in a van next to the film machine on the back of a truck in what looks like a crater. A few hundred feet from the famous Blue Lagoon, steam rises as a makeup artist battles gusty winds to touch up the lead role in a romantic volcano disaster movie.

The astonishing situation is common for the island country, which has seen a surge in production since the already healthy 25% discount on products was increased two years ago to 35% for qualified larger products.

More from Variety

“Fires,” which shot over 28 days, is the latest project to be filmed in the small country and has attracted several big names, including HBO’s “True Detective: Nightland” in 2023 and CBS Studios this year. BBC historical drama The King and the Conqueror and Lasse Hallström’s Scandinavian noir Dark, also for CBS.

“Lights” has a modest crew—certainly much smaller than that of its director, up-and-coming director Ugla Hauksdottir, with whom she directed the massive FX series “Alien: Earth” earlier this year. But the commercial project, based on the popular and visionary Icelandic novel, couldn’t be more timely: the town of Grindavik, located near the film set, was recently evacuated after the Sundhnuksgigar series of volcanoes erupted. Just last week, the volcano erupted again, covering the nearby Blue Lagoon parking lot with lava.

Jonsson says keeping the crew safe was the biggest challenge when filming near an active volcanic zone. “We had excellent cooperation with the police, the Icelandic Association for Search, Rescue and Injury Prevention, the Icelandic Coast Guard and the Met Office,” says Jonsson.

Iceland has long been a popular destination for producers looking for stunning locations, such as the Þórufoss waterfall from Game of Thrones or the Vatnajökull glacier, which was the icy planet in Interstellar.

Now, the increased rebate has brought in millions of dollars of production—roughly $29 million in the case of True Detective, the largest foreign cultural investment the country has ever seen. The filming was so high-profile that some local filmmakers began to worry that lawmakers might prioritize foreign investment over domestic creatives who rely on the state film fund to finance their films.

Director Baltasar Kormakur, one of the biggest figures in the Icelandic film industry, says this is not the case. The owner of RVK Studios, which provides a state-of-the-art facility for both Icelandic and international productions, says spending on international production benefits local film production for several reasons: “It has really changed the industry for the better.”

He argues that it is harmful to blame rebates for causing wage inflation or crew monopolization. “Are you saying you should keep people out of work so you can get them cheap? When the industry grows, there are all sorts of demands, people want more salaries and they get better, which is great. So I’m all for it, I don’t want to oppress people,” says Kormakur.

But Jonsson, the “Fire” producer, warns that the government needs to continue to heavily subsidize local producers, especially as international filming has driven up wages and production costs. “In my view, there needs to be focused policy attention to support domestic production and maintain a healthy balance,” he says.

When Kormákur purchased property in an industrial area near Reykjavik, he decided to build RVK Studios with the amenities he would like to have at other stages. Instead of big, noisy fans, the huge floors of the sound stages are heated by Iceland’s famous geothermal energy, and Kormákur asked that the stages have windows so crew members could see daylight even when working on long-shot productions.

Kormakur is also developing the nearby area, which will eventually include apartments, restaurants and shops to create a vibrant manufacturing community. After True Detective moved its research center to Alaska, RVK Studios most recently produced the historical drama series The King and the Conqueror, starring James Norton as King Harold of Wessex. Kormákur directed the first episode and co-produced the series, which circulated among studios for over six months, featuring many period costumes and sets.

Iceland’s Film Commissioner Einar Hansen Tomasson emphasizes that diverse locations and film tourism are only part of the picture. One goal of the increased incentives is to help develop other areas of the business—from visual effects to voice acting—using local orchestras.

“We want productions to stay in Iceland longer. We want them to use the infrastructure that Icelandic producers have taken the risk of investing in,” he says.

Thomasson says this helps teams gain experience working with the likes of Clint Eastwood and Christopher Nolan. And he notes that local production also receives a production incentive.

“This is not a fight between one and the other. It’s one ecosystem that we all benefit from,” says Thomasson.

“Overall, the system strengthens Icelandic industry.”

The best in variety

Register for Variety Newsletter. To stay up to date with the latest news, subscribe to us Facebook, TwitterAnd Instagram.