Land-based fish farming in the US is economically unviable, warns sector pioneer as activists push to transition BC from ocean-based salmon aquaculture.
By Fabian Dawson
SeaWestNews
Growing salmon in land-based tanks, often touted by activists as an alternative to ocean-based aquaculture, is a fantasy that doesn’t make dollars or sense in today’s economic climate, warns Johan Andreassen, co-founder of Atlantic Sapphire.
Andreassen’s company has been the go-to example for anti-fish farming groups in British Columbia, after he and his partners initiated a large-scale land-based salmon farming project in the US.
Since its inception in 2017, Atlantic Sapphire has suffered a series of technological and biological setbacks, including mass fish mortalities, system malfunctions, and escalating operational costs, which have delayed production targets and shaken investor confidence.
Despite raising hundreds of millions and branding itself as the world’s largest land-based salmon farm, Atlantic Sapphire has struggled to scale amid the immense challenges of replicating ocean conditions on land.
Last week, Andreassen took to social media to say the economics of land-based aquaculture systems have broken under the weight of soaring capital costs and interest rates.
SalmonBusiness.com, reporting on his LinkedIn post, said land-based salmon farming in the United States has become economically unviable, even as new US tariffs on imported salmon renew pressure for domestic production.
“Today it costs around $40/kg of capacity to build a (land-based salmon farm). Replacing US imports would require $26 billion in investment, and at today’s return expectations (around 12%), that would mean needing $4.80/kg in net profit — which is 3–5x what most producers earn today,” Andreassen said.
“Even at half the CAPEX, it’s still a stretch.”
Andreassen also noted that even if the funding existed, it could take a decade or more to develop enough infrastructure to replace US salmon import volumes, reported SalmonBusiness.com.
His warning lands as the Liberal government presses forward with its controversial plan to phase out ocean-based salmon farms in BC by 2029, a move made despite advice from its own scientists who have found minimal risk from salmon farms to wild stocks.
The government’s activist-induced transition plan for the BC salmon farming sector which involves moving ocean-based facilities to closed-containment operations, lacks scientific, financial, and environmental backing, according to industry representatives and their First Nations partners.
If enacted, the ban would eliminate the province’s top agri-food export and destroy 4,560 jobs. Additionally, it’s projected to leave taxpayers liable for $9 billion in compensation to existing salmon farmers, suppliers, and First Nations.
Unlike activists, who advocate for land-based salmon farming without firsthand knowledge of its limitations, several sector leaders have warned against eliminating marine-based operations in BC.
Kuterra, a pioneering land-based fish farming operation in British Columbia — frequently cited by activists — has also voiced concerns, stating that the plan to ban net-pen farms would be harmful to the growth of closed-containment aquaculture in the region.
“A full stop removal of the net pen salmon farms in British Columbia would be disastrous for the whole industry because the resources that exist to support the net-pen salmon farms are also important for land-based salmon farmers,” said Cody Smith, General Manager of Kuterra, which operates in collaboration with the Namgis First Nation.
“And so, if those resources left the province, it would be a much less attractive region to invest a significant amount of money and build a large-scale land-based salmon farm here,” Smith told SeaWestNews in an earlier interview.
“For land-based aquaculture to have success in British Columbia, there needs to be a successful period where the land-based farms operate in parallel with the open-net pen systems,” he said.
Robert Walker, president of Gold River Aquafarms Ltd, another land-based fish farmer in BC, said the collapse of the net cage sector will be a setback for the land-based sector because the supporting infrastructure will not be there.
Currently in BC, all existing salmon farms are supported by the First Nations communities in whose territories they operate.
Under the banner of the First Nations for Finfish Stewardship (FNFFS) coalition, they have stated that land-based fish farming is not a viable path for them.
“Some Nations in this coalition have completed feasibility studies… and they came to the same result: it is not possible,” FNFFS has stated. If it were truly viable, they argue, First Nations would have made the transition already.
Global experts in fisheries, aquaculture, and climate science have criticized the push by activists to transition all salmon farms in BC to land-based systems immediately, calling it impractical, irresponsible, and environmentally damaging.
They argue that producing the global supply of salmon entirely on land would consume as much energy annually as a city of 1.2 million people and significantly increase carbon emissions.
Experts also point out that raising Atlantic salmon in land-based facilities is approximately 12 times more costly than ocean farming.
A recent study estimates that relocating Atlantic salmon production on Vancouver Island to land-based tanks would generate an additional 22.9 million kilograms of greenhouse gas emissions annually — the equivalent energy consumption of a city like North Vancouver, with a population of 52,200.
A BC government-commissioned report projected that replacing the province’s current salmon farming output with recirculating aquaculture systems (RAS), also known as land-based or closed containment systems, would demand a capital investment between $1.8 and $2.2 billion.
Prepared by Counterpoint Consulting Inc., the report also concluded that it would take at least a decade before BC could develop a land-based salmon farming sector operating at a stable, commercial scale.
These findings echo those of an earlier government report — The State of Salmon Aquaculture Technologies, released in February 2020 — which cautioned that RAS systems require large amounts of land, water, and power, resulting in a significant environmental footprint, particularly in greenhouse gas emissions.
Ocean-based salmon farmers have consistently produced the most sustainable animal protein in the world, according the Coller FAIRR Protein Producer Index, which is the most detailed assessment of the world’s largest meat, dairy and aquaculture companies.
(Main Image shows Johan Andreassen, co-founder and former CEO of land-based salmon farmer Atlantic Sapphire. File Photo: Atlantic Sapphire.)