Land-based salmon farming, a method addressing many of the environmental and operational challenges of traditional sea-based systems, is poised for a transformative decade. Long constrained by technical and financial obstacles, 2024 marks a significant inflection point, with production volumes expected to nearly double from 13,000 tons in 2023 to 23,000 tons in 2024. This growth underscores the maturation of technologies and increased investor confidence.
The report “The Inflection Point: Outlook for Land-Based Salmon Farming”, prepared by experts from the Boston Consulting Group (BCG), examines the growth and potential of land-based salmon production. Below, we summarize the key aspects shaping this dynamic sector of the salmon industry.
Why Land-Based Salmon Farming?
The traditional sea-based salmon farming industry faces growth constraints due to site availability, environmental concerns, and regulatory pressures. In contrast, land-based farming offers several advantages:
- Reduced environmental impact: Technology eliminates risks of fish escapes, sea lice, and waste pollution in open waters.
- Regulatory benefits: Lower environmental impact has fostered positive sentiment among governments, potentially reducing bureaucratic hurdles.
- Proximity to markets: Facilities can be established near major consumption markets, reducing transport costs and carbon footprints.
Land-based systems leverage established practices for juvenile salmon farming and advanced technologies such as recirculating aquaculture systems (RAS), hybrid flow systems (HFS), and flow-through systems (FTS), each offering unique benefits and challenges.
Technological Maturation and Operational Stability
Significant advancements have been made to address operational hurdles. For instance:
- RAS facilities: These systems recycle over 90% of the water, offering location flexibility and stable environmental control. However, they require complex biofilters, previously linked to water quality issues.
- Hybrid systems (HFS): By combining RAS and FTS elements, HFS reduce risks and require less technological complexity. Early adopters like Salmon Evolution in Norway have achieved harvests with over 96% premium-quality salmon.
These advancements have bolstered confidence in the industry’s ability to achieve stable operations and scale production efficiently.
Economic Viability
The economics of land-based salmon farming are becoming increasingly competitive:
- Production costs: Large-scale facilities are estimated to achieve production costs of €5.0–5.5 per kilogram, comparable to conventional farming.
- Market pricing: The ability to consistently deliver high-quality salmon allows land-based operators to secure premium prices. Additionally, year-round stable conditions enable strategic harvesting during periods of high demand.
- Capital investment: While initial capital expenditures (CAPEX) for land-based facilities are higher than conventional methods, they avoid licensing costs associated with sea-based operations.
Industry Growth and Future Outlook
The study projects global capacity for land-based salmon farming to reach 190,000 tons by 2030, representing 5-6% of the global salmon supply. The industry is expected to complement traditional farming rather than completely replace it, maintaining a favorable balance between supply and demand.
However, challenges remain:
- Capital requirements: Annual investments of approximately €700 million will be needed to sustain growth.
- Regulatory hurdles: Delays in permitting approvals, especially in regions without established aquaculture industries, remain a bottleneck.
- Talent development: Building a workforce skilled in farming, engineering, and project management is crucial for long-term success.
Key Players and Leaders
Leading companies like Salmon Evolution, Nordic Aqua Partners, and Proximar have demonstrated the potential of land-based salmon aquaculture through successful harvests. These pioneers are expected to drive most production growth, leveraging their operational expertise and scaling capabilities.
Conclusion
Land-based salmon aquaculture is no longer a distant possibility but an emerging reality. As technology continues to mature, with strong support from investors and governments, the industry is poised to play a significant role in meeting the growing global demand for sustainable seafood. The coming years will be critical for demonstrating the commercial viability of this innovative approach, paving the way for a more resilient and environmentally friendly aquaculture sector.
Contact
Sverre Martinsen
Email: martinsen.sverre@bcg.com
Henrik Vedeler
Email: vedeler.henrik@bcg.com
Reference (open access)
Sverre Martinsen, Henrik Vedeler and Nora Beck Sætre. 2024. The inflection point: Outlook for land-based salmon farming. Boston Consulting Group (BCG). 15 p.
