Norway sets new aquaculture traffic lights: still two red areas

The industry was expecting it in the spring, but the Government has moved ahead of schedule. The Ministry of Fisheries and Oceans today unveiled the new color-coding in the traffic light system for aquaculture that will be applied over the next two years in Norway. Among the thirteen salmon, trout, and rainbow trout production areas along the Norwegian coast, six have been given a green light, five a yellow light, and two a red light.

Beyond the growth forecasts announced by the Norwegian Government - 21,000 tons of production capacity in green areas - what is most striking about the new classification is the maintenance of red ones. The Aquaculture Committee report presented last fall included advice that the traffic light system should be evaluated and corrected, and proposed removing the need for farmers to reduce production when sea lice were abundant.

At the time, the former Fisheries and Oceans Minister, Bjørnar Skjæran, said the Committee's proposals would be "important for the Government's further work to create growth in a predictable, controlled and sustainable way." That is why the industry still hoped the recommendation to eliminate the red areas would be heeded. However, Skjæran's replacement, Cecilie Myrseth, has not met their expectations.

"I am concerned that the impact from salmon lice is increasing in several areas, despite the goal being to reduce the impact. If the industry is to grow, it must make changes to reduce the release of salmon lice larvae from the facilities," was the comment of the new Minister of Fisheries and Oceans.

This is how the traffic light system works

To fully understand what the decision announced today by the Norwegian Government means, it is necessary to explain what is the traffic light system that has been applied to the country's aquaculture since 2017 to regulate the production capacity of Atlantic salmon and that, according to the Fisheries and Oceans Ministry, is intended to ensure predictable and sustainable growth in the aquaculture industry.

The system divides the Norwegian coast into thirteen zones where production is regulated according to a set of environmental indicators, mainly sea lice infestation levels. Thus, depending on how these affect wild salmon in the area, it is decided whether farmers are allowed to expand (green zones), whether production is kept unchanged (yellow zones), or whether it is reduced (red zones).

As mentioned, the Aquaculture Committee report published in September proposed eliminating the need for farmers to reduce production when sea lice are abundant, which in practice would be tantamount to eliminating red zones.

Instead, it suggested that "firewalls" be established between zones to stop the spread of disease, as well as other measures such as requiring salmon farmers to act against parasites with a lower infection limit and those above the limit to be subject to a lice tax.

What does the map look like after the 2024 allocation round?

"The new color-coding in the traffic light system will result in more jobs, increased Norwegian food production, greater value creation, and increased export revenues for Norway," said Minister of Fisheries and Oceans, Cecilie Myrseth.

The Government stated this year's colors have been determined based on scientific assessments of the impact of sea lice on wild salmon for years 2022 and 2023. The result, as said above, is that - as can be seen in the map below - six of the country's thirteen production areas receive a green light and will be able to increase production capacity, five receive a yellow light and only maintain it, and two receive a red light which will force them to reduce it.

According to the Ministry's calculations, with this classification the Norwegian aquaculture industry can grow by 6% in the green production areas in 2024. Such growth will be allocated in two stages: first, a part (1%) at a fixed price of NOK 170,000 (EUR 14,811 - USD 16,104) per ton, and then, the rest through an auction.

In addition, farmers who meet the exemption criteria will receive up to 6% growth based on specific rules in the production area regulations. This is regardless of the color of the production area. The price is also NOK 170,000 per tonne. The remainder, including what is not sold at a fixed price in green areas, will be allocated through an auction of new permits.

This decision could potentially result in an increase of approximately 21,000 tons of production capacity in green areas, while the reduction in red ones is estimated at approximately 11,400 tons. However, the Ministry says the actual reduction could be less, depending on how much production capacity is exempt from reduction under the exemption rules.

New for this year

The Ministry of Fisheries and Oceans' release on the new 2024 aquaculture traffic lights highlights some new developments, such as an evaluation of especially important and vulnerable salmon stocks and whether they are more affected than other stocks in the same area. In addition, there has also been an assessment of how wild salmon have been affected by salmon lice over the past seven years and what it means for wild salmon stocks as a whole.

Nevertheless, the Government's release also recalls that "At the same time, aquaculture generates income, both for the industry and the public sector. Therefore, decisions about color-coding involve a balancing of various considerations."

Likewise, it is explained that the color-coding directly follows the action rule in the traffic light system in areas where the experts' assessment of the environmental impact is the same in both years. However, it points out that, as this evaluation differed in 2022 and 2023, two of the areas - North Hordaland to Stadt (PO4) and Helgeland to Bodø (PO8) - have been assessed separately.

"In both areas that have been separately assessed, I have placed the greatest emphasis on the condition of wild salmon. In PO4, I have also emphasized the impact of salmon lice on wild salmon over time and the need to reduce this burden. In PO8, it has been important not to increase the risk of unacceptable impact, and therefore we do not offer growth in this area," said Minister Myrseth.

Just yesterday, Sjømatbedriftene - Seafood Companies, a politically independent national business organization representing all sectors of the seafood industry from production to sales in Norway - had urged the Government to halt downsizing in red production areas. In doing so, besides recalling the recommendations of the Aquaculture Committee, the organization also pointed out that a further reduction could have significant negative consequences beyond just aquaculture companies.

"There is little doubt that the consequences could be serious in terms of increased layoffs and unemployment. We need political implementation capacity to establish a new environmental technology scheme, and quickly. This is something the minister should present as a separate matter before the summer. Neither the industry nor the wild salmon have time to wait until 2027," said Robert H. Eriksson, CEO of Sjømatbedriftene. After learning of the decision announced today, the organization has reaffirmed this and expressed its disappointment with the color given by the Government to the traffic light system.