"At a meeting in August, we talked about wanting to take in refugees on Svalbard -.. both settlement and a reception centre may be relevant," Espen Klungseth Rotevatn, who leads the Green Party on the islands, told Norway's Vårt Land newsaper.
With the island's population of 2,600 people outnumbered by its 3,000 polar bears, Klungseth Rotevatn hopes that an asylum centre would lead to employment opportunities.
Last week, one of the archipelago's main employers, coal mining company Store Norske, announced that they were laying off 150 workers.
"A reception centre would of course create jobs, but that is a positive side effect of something much more important than coal mining, that's not our primary concern. Europe is on fire, and now our values and ethical standards are measured," says Rotevatn.
The only party that has previously proposed sending asylum seekers to Svalbard is the fringe anti-immigrant Norwegian People's Party (NPP).
NPP now say they weren't being serious when they proposed sending 10,000 quota refugees from Syria to Svalbard.
"In my statement, I put it rather bluntly, to show that there was no capacity to cater for so many in such a short time," Christian Eikeland of NPP in Agder told Vårt Land.
The Green Party has asked the governor of Svalbard to look into the legal aspects of the plan, as Svalbard has a special status and is not a Norwegian county.
"Among other things, Svalbard is not part of Schengen, so we must know whether it is formally and practically possible," Rotevatn said.