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State of the European Union

In the past few years, aquaculture in the European Union has been a rollercoaster ride. Caught between the hammer of soaring production costs and an anvil of waning demand, fish farmers have had a rough time. Looking ahead, there are reasons for optimism. 

There is a big difference between the situation in the aquacultural sector of the European Union (EU) and geographic Europe. The latter has experienced a steady growth in output in the past few years, but within the EU, any growth was absent, commented Javier Ojeda, general secretary of the Federation of European Aquaculture Producers. 

The reason is that Norway and Scotland – the leading powerhouses of European aquaculture – are not part of the trade block, and their output is not reflected in the EU performance. 

The key factor contributing to the stagnation of European aquaculture in recent years was environmental legislation, which Ojeda described as “asphyxiating.”  The ecological campaign embarked on by Brussels is coupled with imports from Asia, Africa, and America that do not comply with production rules mandatory for European farmers. 

This state of events in Europe is not unique to aquaculture. In the last months of 2023, European farmers were taking to the streets, blocking motorways and logistics platforms from France to the Ukrainian border. Although the aquacultural industry was not the driving force of those rallies, the hearts and minds of fish farmers were with the protesters. 

A drama unfolding
What’s happening now is believed to be the climax of a long-lasting crisis that gradually erased the financial health of the European fish farming sector for years. The COVID-19 pandemic and the European energy crisis all played their parts in this process. 

Although European energy prices subsided from the peaks of 2022, they are still far from the levels preceding the Ukrainian conflict. 

“It’s important to remember that energy is a significant input in aquaculture, particularly for maintaining optimal water temperatures and running equipment like pumps and aerators. Higher energy costs can squeeze profit margins for aquaculture producers, especially smaller operations,” said Wasseem Emam, a PhD researcher at the Institute of Aquaculture at the University of Stirling and director of the Ethical Seafood Research. 

Anna Swacha-Polańska, office manager of the Polish Trout Breeders Association, said that the energy crisis is only one piece of a big puzzle. 

“This is an extremely dynamic period in which the world is transforming at a pace never seen before. Rapid climate change, war across Poland’s eastern border, global warming, and the energy crisis are all factors that not only affect the planet but also pose significant challenges for livestock production, including salmonid fish farming,” Swacha-Polańska explained.

In 2022, the Polish trout farmers saw a hike in operations costs across the board, which was a far cry from the official inflation rate. The growth in wholesale prices, however, failed to compensate for the soaring spending.  

“Statistics show that the average selling price for all species increased by 18 per cent, with a 14 per cent increase for pork trout. This is way below the upward cost dynamics. Farmers are more pessimistic about the impact of the war and inflationary situation than about the restrictions during the pandemic period,” Swacha-Polańska said. 

Fish farmers face a worrying trend of many consumers abandoning the food service industry, which became palpable in 2022 and only picked up the pace as Europe plunged into the cost-of-living crisis. 

Aquaculture businesses have adequately responded to the problematic situation by scaling down their operations. A production decline recorded in 2022 likely continued last year, Swacha-Polańska admitted. 

In the past few years, Europe saw a shift towards sustainable and locally sourced seafood, which created opportunities for certain producers but challenges for others, Emam indicated. 

However, economic downturns or disruptions, such as those caused by the COVID-19 pandemic, have had a knock-on effect on consumer spending on seafood products, Emam claimed, adding though that during the pandemic in particular, consumer spending on seafood products surprisingly increased, not the other way round.

Dominating green agenda
To this catalogue of difficulties, European aquaculture should also add the increasing regulatory requirements placed on farms. 

“We must adapt to the reality that environmental and ecological changes are having a huge impact on our business,” Swacha-Polańska said, also warning that climate change may have a detrimental impact on the farms. 

Global warming, caused by increased greenhouse gas emissions, is leading to changes in the temperature of waters, oceans and rivers, with direct consequences for salmonids, Swacha-Polańska said. This is a challenge not only in terms of maintaining optimal farming conditions but also in terms of preserving biodiversity and aquatic ecosystems in Europe. 

“Already today, the problem of high temperatures has derailed the profitability of farming at many trout facilities. It is necessary to intensively search for new technological solutions that will maintain the production volume and, thus, allow small, often family-owned businesses to get back on their feet,” Swacha-Polańska said. 

In addition, the energy crisis, which is linked to the transition to more sustainable sources of renewable energy, pushes fish farmers to find new energy management solutions for their breeding facilities. 

“As the public’s environmental consciousness grows, our industry must adapt to the challenges of reducing carbon emissions and cutting energy consumption while maintaining production efficiency and profitability,” Swacha-Polańska stated. 

Fish farming in Europe stagnates
Photo: Clean Fish

Hatcheries in the same boat
For European hatcheries, the state of play differs depending on their geographical locations and production portfolio. 

In the salmon sector, hatcheries are an integral part of large companies; as such, it is not possible to know their individual performance or activities, commented Gorjan Nikolik, the senior global specialist in seafood at RaboResearch Food & Agribusiness, adding that there are also several independent hatcheries in Norway. 

In the past few years, European hatcheries have invested in technology and research to improve efficiency, reduce disease risks and enhance the quality of juvenile fish produced, Emam said. 

“Advances in genetics, selective breeding, and biosecurity measures have contributed to better broodstock production and overall hatchery performance. They mainly produce salmon, trout, sea bass, sea bream, and carp,” Emam added. 

Certain countries or regions within Europe have a stronger focus on aquaculture and thus have more developed hatchery infrastructure and production capabilities. 

“Countries with extensive coastlines, favourable environmental conditions, and supportive regulatory frameworks generally perform better in terms of hatchery production. Norway, Scotland, Spain, Greece, and Denmark are among the countries known for their significant aquaculture activities, including hatchery operations,” Emam indicated.

The excessive regulatory pressure and tightening environmental standards have had a certain impact on hatcheries, too. Emam noted burdensome licensing requirements, health standards and environmental regulations hatcheries must comply with. 

“Some argue that this has held back the sector and made it less competitive than other global producers such as China. On the other hand, countries with clear and supportive regulatory frameworks typically find it easier to attract investment and foster growth in the hatchery sector,” Emam added.

Despite the headwinds, European hatcheries saw a steady improvement in operational effectiveness in the past year. 

“European broodstock production figures point towards an increase in selective breeding programs. Health risks and disease management are being handled much better, which is reflected in lower mortality rates for a number of species. Production is overall on the rise. The hatchery sectors in Norway, Scotland, Spain, Greece and Denmark have all been performing well with overall increasing demand year on year,” Emam pointed out. 

Advances in these genetic technologies are enabling more precise and therefore, efficient selection and breeding strategies.

There is a lot of talk within the sector of species diversification, and hatcheries are trying to do this to meet evolving market demands and address challenges such as climate change and disease susceptibility. For example, there is growing interest in alternative species with potential for sustainable aquaculture, such as meagre and shellfish.

Reasons to be optimistic
There are intense research and innovation efforts aimed at improving aquaculture practices, developing new technologies, and diversifying species for cultivation. This includes research into alternative feed sources, disease prevention, selective breeding, and offshore aquaculture systems. Social acceptance of aquaculture is undoubtedly an issue.

Public perception related to environmental concerns and fish welfare is being addressed but more from a communication perspective than referring to specific practices. Aquaculture positives are not yet in the open discussions, which creates an unfavourable knowledge gap in the minds of European citizens, Ojeda noted.

“Overall, I think the outlook for European hatcheries is positive, given the renewed drive for continued innovation, their ability to adapt to changing market trends and their attempts at prioritizing sustainability,” Emam said. 

According to Emam, while challenges such as disease management, environmental concerns, and regulatory compliance persist, hatcheries are well-positioned to leverage technological advancements and strategic partnerships to navigate these challenges and contribute to the sustainable growth of the aquaculture industry in Europe.