Critical shortage of smolts may slow growth in Norwegian aquaculture

Last week, Nina Santi from INAQ - a consulting and analysis company specialising in aquaculture and marine industry - presented a new report at the Tekset conference in Trondheim, where she, along with colleagues Sondre Skjelbred Refsnes and Vegard Aksnes, mapped the market for smolt and post-smolt in Norway. 

The report also examines whether the capacity for hatchery fish could become a bottleneck for further growth in salmon production, as new production technology becomes increasingly important.

Santi, a former chief executive of AquaGen, stated that the report shows significant geographical differences in capacity and future needs. While the area from Østfold to Nordmøre (salmonid production areas 1-5, in the south of Norway) appears to have sufficient or even overcapacity of smolt, the analysis points to significant undercapacity in the region from Nordmøre to Finnmark (production areas 6-13), particularly in production areas 6, 10, and 11.

"If the growth trend continues as assumed, there will be an increased need for larger smolt. Just an increase in weight to the same level as in the Faroe Islands (Editor's note: approximately 500-600 grams) will almost double the need for hatchery fish," project manager Vegard Aksnes writes in the report.

Post-smolt strategy becomes crucial

The authors point out that a transition to post-smolt is a prioritised focus area for many farmers. Several major players have already set a strategy to increase post-smolt production. Mowi, for example, aims for its own production of 100 million post-smolt, while Grieg Seafood is heavily investing in 1-kilo post-smolt in Rogaland. Lerøy has also invested in larger smolt in several of its facilities.

"The use of post-smolt results in shorter production time at sea, which can reduce mortality and challenges related to sea lice. In the Faroe Islands, this strategy has led to lower mortality and more efficient production," says Aksnes.

Several obstacles to growth

Despite optimistic growth forecasts, the report points to several challenges for the industry. The 'traffic light system', which regulates production based on perceived sea lice impact on wild salmon, has resulted in several areas not being allowed to increase production. Today, production areas 3 and 4 (Vestland) are marked with red status, which means that farmers here must reduce production by 6%.

In addition, scarcity of power, water, and land can limit the development of new land-based facilities. The aquaculture industry competes with other industrial sectors for access to renewable energy, and it is expected that the power deficit in Norway could become a major challenge as early as 2028.

Big investments needed

Offshore aquaculture and land-based production are highlighted as important future growth areas, but both require large investments. If offshore aquaculture is realised, the authors believe it could potentially provide an annual production of 100,000 to 200,000 tonnes of salmon by 2035. At the same time, there are already several players investing in land-based farming, with around 50 planned projects in Norway.

"Norwegian aquaculture faces both challenges and opportunities. To meet the increasing demand for post-smolt, the industry must invest significant resources in both new production capacities and technological solutions," explains Refsnes.

Need for quick measures

To address the challenges, the report highlights the need for political will to support the development of hatcheries, better coordination of capacity between regions, and a more comprehensive strategy for the use of post-smolt. 

If the current trend continues without necessary measures, the consequences could be significant for one of Norway's most important export industries.

"We are already seeing signs that the imbalance may slow down growth in the aquaculture industry. It is time for concrete measures to ensure that we have sufficient hatchery capacity to meet demand towards 2030," concludes Refsnes.

The report authors:

• Vegard Aksnes holds a master's degree in mathematics and a doctorate in marine engineering and has a background from SINTEF, where he led research on marine structures. He works at INAQ with strategy, technology, and due diligence.
• Sondre Refsnes holds a master's degree in accounting and auditing, as well as financial economics, and has extensive experience in economic analysis and valuation of aquaculture businesses.
• INAQ chief executive Nina Santi holds a doctorate in viral diseases in fish and has long experience in the aquaculture industry, including as former CEO of the breeding company AquaGen.