Scale is key in viability of land-based closed containment systems: report

Halifax, N.S. – How viable is it to farm Atlantic salmon in land-based closed containment systems (LBCC)?

It all depends on scale, says a recently released independent report by Gardner Pinfold, a consulting firm in Nova Scotia.

The report, called Feasibility of Land-Based Closed-Containment Atlantic Salmon Operations in Nova Scotia, says LBCC systems for Atlantic salmon have the potential to be financially viable – provided scale economies are achieved and all performance parameters are met.

Systems typically do not approach commercial viability until capacities exceed 2,500 tons. Below this scale, such as 250 tons to 1,000 tons, LBCC systems are unlikely to achieve commercial viability because of the relatively high unit costs attributable to engineering, building, labour and energy use.

The report adds that prevailing salmon prices are not high enough to cover capital and operating costs at smaller scales.

The industry in Nova Scotia has taken an interest in LBCC because conventional marine-based systems threaten those environments.

But LBCC systems operate at an economic disadvantage since much of their cost goes toward creating growing conditions occurring naturally within the ocean, including the chemical properties and temperature of ocean water, as well as current and tidal action that provide waste dispersion services. As the findings of this report make clear, two factors are central to the challenge of overcoming any cost disadvantage: economies of scale and market.

There is one factor, however, that may have a significant role to play.

The TruroDaily.com reports that the issue for LBCC feasibility lies more with flaws in how aquaculture is regulated in the province and the external costs associated with farming fish on land.

Susanna Fuller, a co-ordinator at the Ecology Action Centre, told the TruroDaily.com that open-net aquaculture doesn’t have to pay for “externalities.” For instance, LBCC has to pay for waste, electricity and oxygen. Fish farms that use open-net pens avoid these costs by using the marine ecosystem for free.

Others in the industry, such as the Atlantic Canada Fish Farmers Association, agree that the return on investment for LBCC systems “just isn’t there,” reports the TruroDaily.com.

The association also points out that when you remove an open-water farm, that environment returns to its “baseline state” in six months to a year. That isn’t necessarily the case with LBCC systems, says TruroDaily.com.

For more on the report, visit: http://novascotia.ca/fish/