Sandeel fishing consultation: draft partial business and regulatory impact assessment

Costs

Option 0: Do Nothing

Continuing the status quo of not allocating quota to Scottish vessels would result in no change in regards EU vessels fishing for sandeel in Scottish waters. Therefore, this option is associated with potential detrimental impact on the sandeel stock and consequently on predatory fish, seabirds and marine mammals.

Also, if the UK Government decided to closure the sandeel fishery in English waters in the North Sea, there could be potential displacement into Scottish waters to the further detriment of the Scottish sandeel stock.

Option 1: Complete closure of all Scottish waters to sandeel fishing (preferred option)

The main costs associated with the preferred option are the costs to businesses (catching and processing) of a sandeel closure. As the position of Scottish Government is equivalent to that of the UK Government, the below cost analysis uses the same data and the same approach as the Defra De Minimum Assessment^[12] for consistency and comparability.

Source: Marine Management Organisation data split for English and Scottish waters

Source: UK sea fisheries annual statistics report 2021

The below section outlines the expected costs to the three main groups of businesses outlined above. Costs are evaluated against Option 0: Do nothing.

1) Scottish catching sector:

As quota is currently unallocated to Scottish vessels and this would be the expected status quo going forward, the cost to the Scottish sandeel catching sector for Option 1 is zero.

However, table 2 below shows landings of sandeel into Scotland by UK vessels in 2018-2020.

Source: Table 2.2c, UK sea fisheries annual statistics report 2021.

2) EU vessels catching sandeel in Scottish waters

The second group who will be impacted by a complete sandeel fishery closure is made up of mainly non-UK vessels who fish for sandeel in Scottish waters and land in any port (UK or elsewhere). This group will face the largest cost as they are the main catchers of sandeel in Scottish waters. The vessels are primarily Danish, or simply EU vessels where the home country is not specified in the data.

From 2015-2019, vessels catching sandeel from Scottish waters caught on average 17,900 tonnes of sandeel each year, worth £3.8 million in 2021 prices^[13]. The net present cost of Option 1 is therefore estimated at £32.8 million, assuming the closure starts in 2024, with a 10-year appraisal period discounted at 3.5%.

However, it should be noted that the above estimation is based on revenue and not profit, and therefore will be an overestimation of business impact. There is also no assessment of the potential for non-UK vessels to move their fishing to other waters and therefore offset the loss of a Scottish waters closure.

The data used for this estimation was produced by MMO using an assumption of vessel catches split by English and Scottish waters, based on ICES rectangles.^[14]

3) Non-UK catching sector landing sandeel into Scottish ports

The third group of businesses affected will be non-UK vessels which land their catch into Scotland. Whilst in 2021-22 there was no sandeel landings into Scottish ports, in the years prior to that all UK landings were into Scottish ports.

From 2017-2021, non-UK vessels landed on average 2,341 tonnes of sandeel into Scottish ports per year, at an average annual value of £0.5 million. The net present value of the closure to onshore processors is therefore estimated at £4.6 million, assuming the closure starts in 2024, with a 10-year appraisal period discounted at 3.5%.

Other costs

1) Scottish onshore processors

The onshore processing sector is expected to be impacted by the loss of sandeel, a key input into fish meal. Data published by the MMO shows that from 2017-2021 there was an average of 3,258 tonnes of sandeel landed each year into UK ports; it is understood that these ports are all located in Scotland.

Source: Table 2.2c and Table 2.3, UK sea fisheries annual statistics report 2021.

2) Compliance operations

There is expected to be minimal additional compliance costs to Marine Scotland, as monitoring of a sandeel closure will be absorbed by regular compliance operations.

3) Familiarisation costs to fishers and other stakeholders

The cost to the fishing sector of familiarisation to the new regulation is expected to be negligible and so has not been calculated.

Option 2: Extension of the existing closure to all of sandeel management area 4 only

Displacement of sandeel fishing into new fishing grounds is a potential risk of a partial closure in only one area. Such displacement could create detrimental environmental effects

Option 3: Seasonal closure of the sandeel fishery

A seasonal closure could still allow for fishing of sandeel, and there is an environmental risk that the season could change with environmental and biological drivers.

Option 4: Voluntary closure of the sandeel fishery

As with the benefits, the expected costs could range from low to high dependant on the level of voluntary agreement reached. Scottish Government considers the risk of high environmental costs associated with this option as being high and therefore this is not the preferred option. This option would also entail additional management costs of agreeing an annual voluntary arrangement.