Redirection of fishing sector subsidies could increase traceability, transparency and sustainability.
Planet Tracker’s ‘Avoiding Aquafailure’ report forecasts that US$55 billion in financing for regenerative aquaculture is needed by 2050 to close a 20% supply gap, with global demand for seafood set to reach 267 million tonnes by the mid-century.
François Mosnier, Head of Oceans Programme at Planet Tracker, told ESG Investor that this remains a “relatively conservative” estimate given the scale of rising demand for seafood, with the report noting that the supply gap will likely be exacerbated by biodiversity loss from overfishing.
Current estimates show that seafood production levels will reach 217 million by 2050, representing a demand shortfall of 50 million tonnes, according to the report.
The Organisation for Economic Co-operation and Development has forecast that the ocean economy is set to grow at twice the rate of the mainstream economy by 2030, driven by the “undernourished population’s demand for protein”.
The 10 largest aquaculture producing countries generate 89% of the world’s seafood, with China alone accounting for 57%.
The report also noted high species concentration for aquaculture, with more than 75% of the 57 listed aquaculture companies identified by Planet Tracker farming salmon, shrimp or pangasius. This high concentration leaves the fishing industry vulnerable to biodiversity risks, leading to higher costs, more regulation and capped production, below future demand.
Mosnier describes ‘aquafailure’ as the “inability of all of the seafood production systems currently in place to feed humanity”, which under a business as usual scenario the sector is heading towards.
Planet Tracker’s report said that “diversification towards regenerative aquaculture” is vital to avoid aquafailure and prevent biodiversity loss.
Sourcing seafood sustainably
Planet Tracker defines regenerative aquaculture as the production of food from the sea – such as many bivalves including oysters, mussels, and clams, and seaweed species – that provide benefits to the ecosystem such as water filtering or carbon sequestration.
Mosnier said certain types of seaweed sequestering of carbon can also be called regenerative because it provides a benefit to the ecosystem, while also being able to produce food.
“Oysters provide habitat for species that literally recreate an area that used to be depleted of marine life and over time can become full of it again,” he added.
Planet Tracker’s research identified that through the implementation of a diversified seafood production model, the increased use of cultivated seafood, the introduction of bivalves and seaweed, and the transition to a regenerative aquaculture system, global seafood production could be increased by 45 million tonnes.
With technological solutions – such as farming seafood offshore or in land or growing fish in labs – forecast to contribute a maximum of five million additional tonnes of seafood by 2050, embracing regenerative aquaculture will be vital in closing the seafood supply gap.
Planet Tracker analysed the finances of 57 publicly listed aquaculture companies which suggested that the sector would not be able to self-finance either technological solutions to conventional aquaculture or regenerative aquaculture.
“It’s important for investors to engage, and provide financing where necessary,” Mosnier said.
He noted that regenerative aquaculture is a market in its infancy but said it has made a fairly promising start, with aquaculture funds estimated to be approximately US$3.15 billion in total value according to data from ocean and aquaculture investor consortium CREO Syndicate.
If this figure sees a steady rise, it will be “feasible” to raise US$55 billion by 2050, according to Mosnier.
Diverting “harmful subsidies”
Mosnier said that the seafood industry is “already quite subsidised”, with Planet Tracker seeing “no reason why some of these subsidies could be stopped and diverted from activities that negatively impact the ocean to ones that positively impact it”.
“In fishing we have observed that about two-thirds of fishing subsidies have been deemed to be harmful to the ocean because they directly or indirectly contribute to more overfishing,” he said. “A lot of these subsidies will have to be banned in the future because of World Trade Organisation (WTO) agreements signed last year.”
The WTO’s Fisheries Funding Mechanism aims to curb subsidies to illegal, unreported and unregulated fishing, and prohibits subsidies to fishing on overfished stocks. The WTO said it represented the “first broadly-focused binding multilateral agreement on ocean sustainability”.
“In the case of fishing, subsidies could be relocated towards investment in traceability, transparency, monitoring and sustainability,” he added.
Mosnier foresees that this “continuous negative impact on nature” will lead governments to “raise the bar” in terms of regulation which will directly impact aquaculture companies and their investors.
“Regenerative aquaculture is the opposite, it’s about coming up with practices that benefits ecosystems, that benefit the environment, that involve carbon sequestration, that create habitats for marine life, but at the same time that produce seafood,” he said.
Mosnier added that the severity and impact of the projected supply gap will be determined by the speed governments and other investors react to the risks caused by parts of the aquaculture industry.