Extracts from an article by ESG Analyst Owen White on the FAIRR Initiative website
FAIRR’S recent regenerative agriculture report found that 63% of the world’s largest 79 listed agri-foods businesses discuss the farming system, shedding light on how corporations view this shift as an opportunity to address the climate, nature, and social impacts of their supply chains.
Yet such initiatives have so far focussed on soils and terrestrial agriculture, leaving the environmental benefits and investment opportunities in aquatic systems, such as aquaculture, untapped.
Regenerative aquaculture aims to deliver commercially viable products with ecological benefits, resulting in net positive environmental outcomes. Crucial in this transformative process is the integration of seaweed.
The world of seaweed is remarkably diverse, boasting over 12,000 known species. Only 0.1% of these species are used commercially but these already deliver a myriad of applications.
Seaweed cultivation is inherently regenerative, though there is a need to deepen knowledge on this at scale. Unlike traditional terrestrial agriculture, seaweed farming doesn’t require fertilisers, pesticides, freshwater, or extensive land. Macroalgae also plays a pivotal role in supporting biodiversity, carbon sequestration, and bioremediation.
With the rapid growth of the aquaculture industry and ample ocean space there is a clear potential for seaweed in enabling economic diversification and environmental remediation in coastal and offshore marine environments.
Asia Dominates Global Seaweed Production. From 2015 to 2020, the FAO estimated that seaweed production accounted for 29% of global aquaculture (excluding shells and pearls) at 35.1 million tonnes live weight, growing at an annual average rate of 2.5%. Of this, cultivation makes up over 97% of production, with wild harvest making up the remaining 3%. Asia, specifically countries like China, Indonesia, South Korea, and the Philippines, are responsible for the majority of global production.
Seaweed aquaculture in Europe and the Americas is currently spearheaded by Chile, Maine, Alaska, France, and Norway – though the rate of expansion is far from that observed in Asia. Private investment and early stage funding amounts to approximately $190 million across 33 deals in the Americas and about $155 million across 58 deals in Europe. (While this appears positive, the figures are dwarfed by the Salmon industry – Bakkafrost alone plan to invest $886 million in farming Scottish salmon between 2022 and 2026.) Typically, seaweed production in colder waters is highly seasonal, producing a single harvest annually between April and May.
In the European and American markets, current investment predominantly focusses on product development which draws venture capital due to the promising returns. However, this approach might not be the most conducive to industry growth. Bottleneck issues lead potential users of seaweed in sectors like bioplastics, pharmaceuticals, and nutraceuticals (functional foods), to seek a steadier supply of raw ingredients from Asia.
As a resolution, blended finance and impact investors present viable avenues for raising the capital efficiency of seaweed cultivation and processing. Such advances in production could drive down final product costs and secure the regenerative benefits of seaweed farming.
One such mechanism for unlocking these benefits is scaling investment into biorefineries. If located near cultivation sources, refineries maximise the efficiency of macroalgal production by limiting energy costs when transporting wet mass seaweed along with creating both high and low-value products for diverse markets.