This article was originally published in Norsk Fiskerinæring (10/2024) in the section «Blakstad tar ordet» and is authored by Vegard Aksnes and Frode Blakstad. The original text can be found here (in Norwegian): https://norskfisk.no/2024/11/26/suksesskriterier-for-ny-produksjonsteknologi/?
Today’s coastal-based aquaculture in conventional, open cages faces increasing production challenges. Warmer seas, heavy lice infestations, disease outbreaks, and recurring challenges with the barbed wire jellyfish lead to welfare problems and excessively high mortality. To address this, new production methods and new production technology are emerging and becoming increasingly relevant to move the aquaculture industry in a more sustainable direction. In this article, we discuss six success criteria for new production technology in the sea and how these can contribute to:
- Significant improvement in fish health and welfare
- Minimal impact on climate and environment
- Economically sustainable choices
- A robust supplier industry
- A boost to the industry as a whole
- Increased societal acceptance
While We Wait for the Authorities
The development permit scheme is controversial, but it at least showed that the aquaculture industry has great innovation capacity when it comes to new production technology. Many ideas were put on the table, and some were materialized through the scheme. Much was put on hold, including several of the solutions that were granted permits. In the coming months, the authorities will present a number of proposals for changes that will shape development in the coming years. Fisheries and Ocean Minister Marianne Sivertsen Næss promised in September that a proposal for an environmental flexibility scheme will be ready by the end of the year. It is expected that the proposal will include the possibility of converting ordinary commercial permits into several new permits using new technology and new production methods. There is anticipation as to whether the solution will be technology-neutral or prioritize, for example, semi-closed or closed solutions over other technology. In October, DNV presented results from the overall impact assessment for the three areas opened for offshore aquaculture. Based on this, we expect that applications to build out both Frøyabanken North and Trænabanken will be opened in the first quarter of 2025. In the spring of 2025, the government will also present a new aquaculture parliamentary notice that will take a holistic look at the licensing system for aquaculture in the coastal zone.
Current Status of New Production Technology in the Sea
In connection with Seafood Talks, Norsk Fiskerinæring published a comprehensive status update on new production technology both at sea and on land, and in INAQ’s own overview, we have around 50 production technologies that are being worked on more or less actively. We will not repeat the entire overview here, but it is necessary to highlight the main trends and their status.
Submerged farming operations are highly relevant, and experiences so far show a good reduction in lice infestation and the need for treatments. After pioneering work by Sinkaberg and AKVA Group, Lerøy is now the farmer with the most focus on submerged operations. AKVA Group’s technologies are the most widespread, but Scale AQ also has submerged cages in operation from 2024. A couple of other startups are also focusing on submerged solutions, including Subfarm, which is also looking at international opportunities.
In closed and semi-closed systems at sea, there are significantly more players. A few produce fish for grow-out; Akvafuture with its own technology and Salmar with Marine Donut, while it is mainly post-smolt that is produced in closed facilities at sea today. Lerøy, Salmar, Mowi, Hofseth, Eide, and Nekton (not an exhaustive list) all have some form of closed/semi-closed production at sea. Among the suppliers with technology at sea, Ovum (The Egg), Seafarming Systems (Aquatraz), Fiizk, Bluegreen Group (Marine Donut), Aquafarm Equipment, and FishGlobe can be mentioned. Some new ones are also on the way: Nordic Blu Technology in Fauske is building its own technology, while Marad Norway and Westcon Hexacage are examples of new suppliers that have received attention recently.
Exposed aquaculture in steel structures is the first step towards offshore aquaculture, where both Salmar Aker Ocean and Nordlaks are beginning to gain some operational experience with Ocean Farm 1, Arctic Offshore Farming, and Havfarmen. Utror, in collaboration with Aibel, is currently the only player with stated plans for offshore aquaculture, but more will likely join when applications for development open in the spring.
A lot is already happening, but with the aquaculture parliamentary notice, environmental flexibility scheme, and the announcement of areas for offshore aquaculture, there could be a new wave of development or implementation of new technology, similar to what we saw through the development permits. How can we ensure that this technology development contributes in the “right” way?
What Does It Mean to Succeed with New Production Technology?
Through the development permit scheme, only projects with “significant innovation and significant investments” were granted approval. Significant innovation was equated with unique technology, which unfortunately made it a first-come, first-served situation for some technologies. At the same time, the criterion of high investment cost limited cheaper solutions.
As we now enter a new round of changes in production technology, we must ensure that we are not similarly limited. We should discuss what it means to succeed with new production technology. And not least, who succeeds with new production technology? Is it the farmers, suppliers, industry, or society? The changes happening in the industry now should be an opportunity for all these stakeholders to succeed. We therefore propose some success criteria for new production technology. These are intended as input for everyone involved in the development or implementation of new production technology at sea. Whether they should be included in future licensing conditions or not is not up to us, but they should at least contribute to the discussion about where the bar should be set.
- The technology must contribute to a significant improvement in fish health and welfare.
Production in new technology should be compared with reference production in conventional facilities under comparable conditions. The production must be able to document fewer lice, less disease, and lower mortality, and it must be documented that the fish have good welfare in a good and healthy production environment. Good health and good welfare will in turn lead to good growth and good product quality.
- The technology must have minimal impact on the climate and environment.
Aquaculture takes place in our common areas and new production technology must lead to minimal impact on the local environment. First and foremost, it is important to minimize lice production in the facility and thus the impact on wild salmon. Designing to prevent escapes is both self-evident and a regulatory requirement, but there have been examples of escapes from new and “escape-proof” technology in the past, so here you have to stay focused. Feed waste and sludge constitute significant emissions from most forms of production, and eventually the collection of as much organic waste as possible must be a goal.
- The technology must be economically sustainable.
The investment cost for new production technology will naturally be higher than for conventional plastic cages, at least initially. If the technology is scalable and is used by several companies, you will eventually be able to achieve economies of scale. Operating costs (such as maintenance costs and energy costs) associated with the technology itself can contribute to higher production costs for fish, but new technology can of course also contribute to lower production costs, for example through better feed factors and reduced need for delousing treatment. Some technologies are dismissed due to high investment costs, even though they can contribute to more profitable operations in the long run. For this reason, it may make sense to link technology costs more closely to actual production and focus less on investment cost per production volume. In the energy sector, the term “Levelized cost of energy (LCOE)” is often used. This is the sum of investment costs and operating costs over the lifetime of the plant divided by the plant’s total energy production. A similar term in aquaculture would be “Levelized cost of fish (LCOF)”. This will be the average cost of building and operating production technology per kilogram of fish produced over the life of the facility. This will highlight the value of both longevity and production improvements, and thus provide a better basis for investments in new technology.
- The technology must contribute to a robust supplier industry.
A robust supplier industry is a prerequisite for succeeding with new forms of production. Today, this link in the value chain barely makes money and has a low operating margin (average 2-3% in 2022). They therefore also do not have the opportunity to take too much risk themselves. Fish farmers should take greater investment risk, either bilaterally with a supplier, or together with several fish farmers and suppliers through technology development partnerships where the risk is shared (e.g. Joint Industry Projects, which are widely used in offshore oil and gas). If you look at oil and gas, you have a strong supplier industry with a high export value. Correspondingly, the supplier industry to aquaculture will have great potential for exports, confirmed by the selection of seafood as the latest addition to the national export initiative.
- The technology must contribute to lifting the industry as a whole.
The industry depends on everyone succeeding, not just individual players. The farmers influence each other, and each farmer’s production depends on what the neighbor does. Those who run well are responsible for dragging those who are lagging behind. We need good bellwethers who share expertise and experiences, both positive and negative. If you lift the industry as a whole, you will more easily get the green light and opportunities for increased growth.
- The technology must contribute to increased societal acceptance.
If you succeed with the other success criteria, you will also be able to contribute to increased social acceptance. Only by improving this will the authorities be able to allow growth in the longer term. High mortality and poor fish welfare have received a lot of attention recently, and sharing knowledge and experience about changes in production form to a broad audience is necessary. Social acceptance does not come by itself and requires trust that the industry is running well and addressing challenges.
What Does It Take to Succeed?
The list of success criteria is extensive and reflects high expectations. How can these goals best be achieved, and what characterizes those who have succeeded or are on their way to succeeding?
Focus on the living conditions of the fish, collaboration between actors, and sharing of experiences and knowledge are central themes for achieving the success criteria. To achieve the best possible living conditions for the fish, technology and biology must work together, with biology as the boss. Interdisciplinary project teams with expertise in biology, husbandry, technology, economics, and change management are necessary for success. Much of the interdisciplinarity can be covered through close collaboration between suppliers and farmers, and many of those who have succeeded have had precisely this close collaboration. Aquaculture expertise among suppliers and technology expertise among farmers is a great advantage and contributes to better communication and cooperation. A culture of sharing experiences and knowledge, both internally within companies, within the industry, and with the general public, is also crucial for achieving the success criteria.
By working with the strategic whole to achieve these success criteria, we can ensure that new production technology not only meets today’s challenges but also lays the foundation for a sustainable and profitable future.