Juncus castaneus; The Chestnut rush is a rather rare species on Iceland. I photographed this plant near Akureyri (where it is't supposed to grow!). It seems the species is most common in eastern Iceland and in the North-Western fjords. Characteristic for this species is an inflorescence (only one or two flower clusters) embraced by a short bract (about the length of the inflorescence) and a longer bract (about twice the length of the inflorescence).
It is a member of the rush family (Juncaceae).