The Arctic cryosphere is the epicentre of acute global change impact, with abrupt warming and amplification driving rapid sea ice decline and irreversible glacial ice loss. A key challenge is understanding how the cryosphere meltdown will impact Arctic marine carbon cycles and ecosystems. Here, we use organic geochemical biomarkers to trace the contribution of different planktonic groups to organic carbon in Arctic fjord sediments (Kongsfjorden, Svalbard) during past warmer and colder (than present) climate states. We show that phytoplankton community structures changed abruptly with variable sea ice cover and glacial ice loss. Our results imply that future deglaciation of Svalbard fjords will likely increase primary productivity in a “blue” (summer ice-free) scenario; however, the potential for fjords to serve as hotspots of marine organic carbon burial will likely be constrained due to warmer, stratified waters and reduced meltwater-induced supply of critical nutrients.