3 minute read 1 Mar 2023
Northern lights above the beach in Utakleiv

Critical trends shaping the Norwegian aquaculture industry in 2023

Authors
Eirik Moe

Nordic Family Enterprise leader and Marine and Aquaculture Sector Leader

Partner with broad experience from the professional services and corporate advisory industry. Dedicated to skiing and arctic cod fishing during winter and boating in summer.

Merete Skage

Partner, Strategy and Transactions, EY Nordics

Dedicated transaction partner who cares about making a positive difference. Focus on aquaculture. Enjoys the hectic transaction cycle. Thinks best while on a mountain top.

3 minute read 1 Mar 2023

The seventh edition of the annual Norwegian Aquaculture Analysis from EY illuminates trends defining the future of the industry.

In brief: 
  • In this years’ report, EY teams analyze the characteristics of each segment in the aquaculture value chain to understand current challenges and opportunities.
  • From resource rent tax to economic rent, the article uncovers key focal points that the industry must monitor to achieve growth and success in 2023 and beyond. 

The year 2021 was a successful one for Norwegian fish farmers in terms of topline growth, with the aquaculture industry bouncing back from the slow-down caused by the COVID-19 pandemic. In 2022, supply became somewhat more constrained with exported volumes behind that of 2021, but demand remained high. This year, the aquaculture industry awoke to a new tax regime that came as a surprise to the industry and its investors. 

Changing trends and new regulations that are shaking up the industry have been carefully observed and explored in the Norwegian Aquaculture Analysis 2022. The benchmark report delivers critical industry insights, serving as a knowledge source for people in the industry and other stakeholders interested in learning more about the developments in the sector.

While last year’s report focused more on the growth of the salmon industry, seaweed cultivation, land-based fish farming and climate change, this year we see other focal points—such as resource rent tax, industrialization of salmon feed ingredients and economic rent—emerge.

The report leverages the unique and extensive EY seafood company database (EY-SCD), which has been expanded with key data for 1,250 companies within various segments of the aquaculture value chain. Given below are a few key highlights from the extensive report:

The introduction of the resource rent tax 

On 28 September 2022, the Norwegian government presented its plan to introduce a 40% resource tax on the commercially licensed sea-based production of salmon starting from 1 January 2023. It is proposed that the tax proceeds from the resource rent tax should be distributed equally between the state and the local municipalities. The proposal has received mixed reaction from the industry, mainly due to the structure of the resource rent tax combined with multiple uncertainties. The report this year explores the resource tax rate and its impact on the aquaculture industry.

Sustainability

To continue to grow sustainably, the industry needs to find new and sustainable feed sources, which will be critical to ensuring reduced emissions and costs. Overcoming barriers from high cost, regulatory framework, customer acceptance and nutritional quality will be especially important to meet the national ambitions of sustainable feed ingredients. The report includes views on critical success factors that must be addressed to realize the potential for novel feed ingredients.

Technology and innovation 

Today, the aquaculture industry is dependent on manual processes for fish health, ineffective feeding systems and a silo-based development model where they do not collaborate sufficiently to solve common operational challenges. Data sharing and access to insights across all players in the industry will enable more disruptive technological development. This will enable the industry to solve sustainability challenges and help develop innovative, advanced solutions. The report also takes a close look at the aquaculture startup landscape and shares observations on the industry challenges they aim to address.

Economic rent

The salmon industry has yielded good returns over the past 30 years and has achieved a super profit. It may be attributed to being a competitive supplier of seafood in a market with high demand growth and scarce supply, partly due to the overfishing of wild populations. The report explores whether the taxation of economic rent can be neutral and its impact on competitiveness.

Almost 60% of the startups within the aquaculture landscape offer "digital native solutions,” with largely software-based products and services, with or without an associated hardware component. This is not surprising, as digitalization has great untapped potential throughout the aquaculture value chain.

Download the Norwegian Aquaculture Analysis 2022 from EY to explore the most relevant challenges and opportunities that line the path of the industry toward 2023 and beyond.

Summary

The benchmark report from EY provides insights crucial for the growth of the Norwegian aquaculture industry. Taking pre-emptive action and strategizing to keep up with the trends is crucial for the industry to stay competitive and successful through 2023 and beyond.

About this article

Authors
Eirik Moe

Nordic Family Enterprise leader and Marine and Aquaculture Sector Leader

Partner with broad experience from the professional services and corporate advisory industry. Dedicated to skiing and arctic cod fishing during winter and boating in summer.

Merete Skage

Partner, Strategy and Transactions, EY Nordics

Dedicated transaction partner who cares about making a positive difference. Focus on aquaculture. Enjoys the hectic transaction cycle. Thinks best while on a mountain top.