There's no source cited in the linked article other than The Daily Mail. For the unfamiliar, they're a British 'news outlet' who are notorious for writing articles that grossly misinterpret source data, to forward their own agenda.
http://ogmundur.is/annad/nr/6578/
(In Google translation) he says porn is already illegal in Iceland (which it is [1], punishable by prison), and he's advocating more enforcement of this, with police resources.
[1] https://en.wikipedia.org/wiki/Pornography_by_region#Iceland
nice map: https://en.wikipedia.org/wiki/File:Pornography_laws.svg