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  • Appraisal of the opportunity for offshore aquaculture in UK waters Project Report: FC0934 Report by: Commissioned by: April 2006

    Epsilon Aquaculture

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    ACKNOWLEDGEMENTS The authors would like to acknowledge the financial support of the UK Department for Environment and Rural Affairs (Defra) and the Seafish Industry Authority (Seafish). Maris Ltd., provided information in connection with the Maris Platform Fish Ranch enclosure concept. Mr Ian Keene-Smith, Dr Jim Treasurer, Dr Douglas Sinclair, Dr James Turnbull, Dr Trevor Telfer, Dr Ian Bricknell, Mr Richard Thompson, Dr Juliana Kerr, Mrs Hazel Curtis and Dr Marion Perutz provided important additional information. We are particularly indebted to Dr Bela Buck and Dr Gesche Krause for giving access to unpublished literature and for providing valuable comment and advice. Report citation The report should be cited as: James, M.A. and Slaski, R. (2006) Appraisal of the opportunity for offshore aquaculture in UK waters. Report of Project FC0934, commissioned by Defra and Seafish from FRM Ltd., 119 pp. Disclaimer The contents of this Report are offered in good faith and after due consideration. The authors, as individuals, Fisheries Resource Management Limited or Epsilon Aquaculture cannot be held responsible for any consequences arising from the use of this Report. Opinions expressed in this Report are those of the authors. The Sponsors of this study; the Department for the Environment, Food and Rural Affairs and the Seafish Industry Authority do not necessarily agree with, or endorse, the contents, conclusions or recommendations of this independent report.

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    EXECUTIVE SUMMARY This report provides an assessment of the potential for open ocean, offshore finfish aquaculture in UK waters using candidate species which would have similar growth and performance characteristics to Atlantic salmon (Salmo salar) and Atlantic cod (Gadus morhua) and with due reference to other potential species candidates. The appraisal addresses economic, financial and marketing issues, with specific reference to scenarios generated with respect to a conceptual large-scale open ocean mariculture system. The environmental, legal and technical implications for offshore aquaculture development are examined in a general context. This desk-based appraisal draws principally on published information, together with data derived from appropriate sources with acknowledged expertise. A projected financial analysis is provided of production taking into account routine market price fluctuations and potential impacts of such a systems production on the marketing of existing farmed and/or wild caught production. The potential market and impact of fish produced within offshore systems is assessed, taking into account quality assurance and consumer/retail acceptance of products grown in aquaculture systems offshore. The ecological considerations of offshore cultivation are overviewed, taking into account potential environmental impacts of such an operation. A general consideration of the legal aspects which may be associated with establishing offshore aquaculture systems is provided, taking into account the possible impact of current and proposed legislation. Examples of available and planned production systems which may be suitable for use in exposed and potentially, offshore UK waters are reviewed. Critical biological and technical aspects of offshore finfish cultivation are examined. The potential use or reuse of existing and planned offshore installations is discussed. The report highlights some deficiencies in technical capacity, biological understanding and legal impediments that may stifle attempts to conduct aquaculture offshore. However, the report provides some strategic conclusions with respect to the potential future development of aquaculture in more exposed and potentially offshore locations. If pilot scale projects are to be taken forward these should, in the first instance, be conducted within the 3nm limit. Furthermore, many of the biological and technical precursors which would be required to underpin the viability of offshore aquaculture could potentially be tested with existing cage systems in appropriate exposed sites. Offshore aquaculture is fundamentally appealing and could be strategically important to the UK in the future. The evidence provided suggests that careful consideration of properly justified calls for R&D is merited in support of aquaculture development in more exposed locations with a view to better defining the prospects for full offshore operations in the future. For those with limited time, the authors recommend reading the INTRODUCTION (Sections 1 1.1.2) and the CONCLUSIONS (Sections 7 7.5).

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    CONTENTS 1. INTRODUCTION .................................................................................................................... 7

    1.1.1 Defining Offshore Aquaculture................................................................................... 7 1.1.2 Background................................................................................................................ 9

    2. PROJECTED FINANCIAL ANALYSIS OF PRODUCTION .................................................. 13 2.1 ECONOMIC MODELLING................................................................................................ 13

    2.1.1 Basics of Aquaculture Economics ........................................................................... 13 2.1.2 Sources of Information on Aquaculture Economics................................................. 14 2.1.3 Offshore Aquaculture Studies.................................................................................. 14

    2.1.3.1 Ryan (2004)..................................................................................................... 14 2.1.3.2 Maris Fish Ranches Ltd .................................................................................. 15 2.1.3.3 Posadas et al. 2001 ........................................................................................ 15

    2.2 BIOLOGICAL MODELLING.............................................................................................. 15 2.2.1 Growth Modelling ..................................................................................................... 15

    2.2.1.1 Single Year Class Production ......................................................................... 16 2.2.2 Feed Conversion...................................................................................................... 18 2.2.3 Feed Cost ................................................................................................................ 18 2.2.4 Mortality ................................................................................................................... 19

    2.3 TECHNICAL MODELLING............................................................................................... 19 2.3.1 Fixed Assets ............................................................................................................ 19 2.3.2 Other Technical Operating Costs ............................................................................ 19

    2.4 MODELLING OTHER COSTS ......................................................................................... 20 2.4.1 Labour Costs............................................................................................................ 20 2.4.2 Financial Costs and Depreciation ............................................................................ 21 2.4.3 Cost of Harvesting ................................................................................................... 21 2.4.4 Cost of Stock Insurance........................................................................................... 21

    2.5 SPECIES CHOICE ........................................................................................................... 22 2.5.1 Introduction .............................................................................................................. 22 2.5.2 Species Options for UK Waters ............................................................................... 24 2.5.3 Fillet Yield ................................................................................................................ 25 2.5.4 Modelling for Species in this Study A Generic Approach ..................................... 26

    2.6 ECONOMIC MODELLING OUTCOMES.......................................................................... 26 2.6.1 Unit Cost of Production............................................................................................ 26 2.6.2 Internal Rate of Return ............................................................................................ 26 2.6.3 Total Investment Required....................................................................................... 27

    2.7 ECONOMIC MODELLING RESULTS.............................................................................. 27 2.7.1 Species A Core Model............................................................................................ 27

    2.7.1.1 Species A - Core Model Assumptions and Growth Projections...................... 27 2.7.1.2 Species A - Core Model Outcomes................................................................. 29

    2.7.2 Species B - Core Model ......................................................................................... 29 2.7.2.1 Species B Core - Model Assumptions and Growth Projections .................... 29 2.7.2.2 Species B Core Model Outcomes ................................................................. 31

    2.7.3 Sensitivity Modelling For Species A and Species B ............................

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