One should always be careful with predictions, but it is certain is that offshore aquaculture can have a future in Norway -- provided the government takes the right steps.
Investments in offshore aquaculture can be economically viable and returns can be significantly higher than investments in mainland economy. However, offshore aquaculture will continue to need major innovation, large investments and will have a high financial risk in the next few years.
The challenge for authorities is to create a framework that does not include large subsidies, but allows risky and socially economically profitable investments at sea to compete for capital with other sectors of the Norwegian economy.
Plenty of room
The offshore basin accounts for 90 percent of the Norwegian economic zone. At present, facilities are located just inside the baseline and less than 10 percent of the Norwegian economic zone is used for the location of fish farms.
There are already a number of offshore industrial suppliers developing technology concepts for the aquaculture sector.
As a result, many offshore suppliers have already focused on transitioning from the petroleum sector to aquaculture at sea to maintain employment along the coast.
Work is underway
The Norwegian Ministry of Trade and Fisheries and the Directorate of Fisheries are now working on facilitating offshore aquaculture projects. Authorities use resources to map open sea areas which are deemed suitable for aquaculture.
However, the government should call for an open dialogue with other players in order to formulate a better knowledge base and speed up the process.
Investments in an offshore aquaculture facility can be significantly larger than in a conventional inland cutting facility.
The high financial risk also means that rational investors will also have a high risk-adjusted return requirement.
Ragnar Tveteras is a professor of industrial economics at the University of Stavanger, Norway.