Given the rapid increase in atmospheric carbon dioxide concentrations (pCO2) over the industrial era there is a pressing need to construct long term records of natural carbon cycling prior to this perturbation and to develop a more robust understanding of the role the oceans play in the sequestration of atmospheric carbon. Here we reconstruct the historical biological and climatic controls on the carbon isotopic (d13C-shell) composition of the North Icelandic shelf waters over the last millennium derived from the shells of the long-lived marine bivalve mollusc Arctica islandica. Variability in the annually resolved d13C-shell record is dominated by multi-decadal variability with a negative trend (-0.003±0.002‰yr-1) over the industrial era (1800-2000 CE). This trend is consistent with the marine Suess effect brought about by the sequestration of isotopically light carbon (d13C of CO2) derived from the burning of fossil fuels. Comparison of the d13C-shell record with contemporary proxy archives, over the last millennium, and instrumental data over the 20th century, highlight that both biological (primary production) and physical environmental factors such as relative shifts in the proportion of Subpolar Mode Waters and Arctic Intermediate Waters entrained onto the North Icelandic shelf, atmospheric circulation patterns associated with the winter North Atlantic Oscillation, and subpolar gyre sea surface temperatures and salinity, are the likely mechanisms that contribute to natural variations in seawater d13C variability on the North Icelandic shelf. Contrasting d13C fractionation processes associated with these biological and physical mechanisms likely cause the attenuated local marine Suess effect signal at this locality.