The Centre for Feed Innovation is an independent think tank that is accelerating the development of novel feed ingredients.
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“Algal oil is a proven, nutritious, safe and sustainable alternative to fish oil,” Aashish Khimasia states, describing it as “a reliable omega-3 source insulated from wild fishery quotas, climatic shocks and seasonal variability” which, he argues, “demonstrated its commercial viability by readily filling the supply gap during the 2023 fish oil crisis.”
The Centre for Feed Innovation’s Research Director is clear about the benefits of this alternative feed ingredient. “Algal oil has proven its nutritional equivalence to fish oil,” he asserts, pointing to data highlighted in the Centre’s recent 2025 Algal Oil State of the Industry report, the first of four planned publications by the thinktank on novel feed ingredients, providing an overview of the current state of development - plus the outlook for future progress regarding nutrition, scalability, safety and sustainability.
“Algal oils can deliver up to 55% EPA+DHA per metric tonne, matching or exceeding premium fish oils, deliver up to 30% lower greenhouse gas emissions while avoiding marine disruption, and are also produced in controlled systems with no risk of marine contaminants such as heavy metals or dioxins,” Khimasia says.
Reliable sourcing of algal oil, he argues, also “helps to protect both producers and farmers from supply shocks," while regulatory and certification support for the ingredient “make it ideal for farmers and producers seeking to meet their ESG targets.”
Aashish Khimasia, Co-Founder and Director of Research at The Centre for Feed Innovation (CFI).
Industry headlines over the past few years have demonstrated increasing interest in algal oil from aquafeed producers, as concerns grow about the long-term availability of fish oil and the need for more predictable sources of omega-3s.
As previously reported by WeAreAquaculture, a recent assessment by the Sustainable Fisheries Partnership highlighted a continued decline in the sustainability performance of several key fisheries supplying marine ingredients, while a separate study published in the journal Nature suggested the industry must find an additional 1.8 million tonnes of alternative feed ingredients each year to meet rising demand for farmed seafood such as salmon and shrimp.
The ingredient has already shown commercial success in aquafeed. BioMar says it has sold more than four million tonnes of shrimp, salmon and marine fish feed formulated with algae-derived omega-3s. In 2023, the company published research showing that Atlantic salmon fed diets in which fish oil was fully replaced with algal oil showed no adverse effects on growth, feed conversion, survival or fillet quality.
More recently, regulatory developments have begun to open additional markets, with Canadian authorities approving Veramaris algal oil for aquafeed in 2024, allowing Cermaq Canada to introduce Cargill salmon feed containing the ingredient across several farms.
Economic data also suggest a profitable future for algal oil. The CFI report states that the global market value for EPA and DHA omega-3 ingredients in 2024 amounted to USD 2.38 billion. Meanwhile, according to the CFI figures, the global fish oil deficit has reached 20,000 MT in 2025, and is projected to increase to 100,000 MT by 2030.
“Algal oil is already a mainstream ingredient in commercial salmon diets, with strong projected market growth,” Khimasia says, pointing out that several leading companies, including Skretting, BioMar, Cargill, and Mowi, have already incorporated algal oil into their feed formulations for salmon.
However, despite the benefits highlighted by the Centre’s report, and what Khimasia describes as algal oil’s “clearer scaling pathway than most novel ingredients”, several barriers remain – including cost.
“Prices remain above fish oil levels except during periods of low fish oil availability caused by climactic events or cancelled fishing seasons,” Khimasia explains, although he adds that the gap is narrowing through innovation by industry players. The CFI report finds that the price for algal oil ranges between USD 6,000-15,000 per metric tonne, making it a competitive alternative when fish oil prices are high.
“Several companies are now focused on expanding the use of circular feedstocks, improving strain selection and incorporating renewable energy into production,” Khimasia points out - however, start-up costs are another barrier in the way of developing algae oil supply: "High upfront investment limits new market entrants without sufficient capital,” Khimasia notes.
Regulation is also a challenge, although progress has already been made in several key regions. “Algal oil has garnered strong regulatory support in leading aquaculture-producing countries in North America, South America, and Europe,” Khimasia says, but “faces slower regulatory approval times in Asia and restrictions on the use of more efficient GMO strains." He adds that the industry’s dependence on refined sugars as a feedstock for microalgae production also creates geographical and cost limitations.
“Expanding wider commercial use will require lower production costs, regulatory approvals in key markets such as Asia, and continued improvements in production efficiency. Securing long-term offtake contracts will also be essential to provide a predictable supply for feed producers,” Khimasia says, noting that R&D is still needed to improve market competitiveness.
Aquaculture feed.
Overall, the Centre’s projection suggests a gradual shift in the status of algae-derived oils. “As fish oil scarcity increases, we see algal oil becoming a structural component of omega-3 supply rather than a premium niche,” Khimasia says.
The report estimates that global supply of algal oil could rise from roughly 20,000 tonnes of EPA+DHA today to about 36,000 tonnes by 2030, which Khimasia points out would represent an expansion of 80%, driven mainly by increased industrial capacity.
"North America and Europe will likely to remain leading markets due to regulatory clarity and established salmon sectors, but Latin America, especially Chile and Brazil, shows strong emerging potential to increase both production and the integration of algal oil into animal feed," Khimasia explains.
“Asia is a key aquaculture market and, pending regulatory approval, we anticipate substantial growth in demand for algal oil there,” he adds.
The CFI report recommends that the algal oil industry, the aquaculture sector, regulators, investors, and governments, take steps to accelerate adoption, ranging from establishing offtake agreements and expanding regulatory approvals in emerging markets to educating the public on algal oil’s benefits to grow consumer demand.
"Collective action from producers, feed companies, and regulators is essential to improve cost competitiveness and accelerate widespread commercial adoption," the CFI argues.
“As the industry grows and these conditions are met, algal oil can become a routine component of feed formulations across most species," Khimasia says.
The full report can be accessed on the Centre for Feed Innovation website.