Potential scale of Scottish seaweed-based industries: research paper
This report provides an assessment of the current status and future growth opportunities for Scottish seaweed-based industries. It includes a scenario analysis that explores the key areas of growth for the seaweed sector and the wider economic and social impacts of possible growth scenarios.
5 Drivers and constraints to the future seaweed-based industry in Scotland
5.1.1 This section provides an overview of stakeholder opinion on how the seaweed industry may develop in Scotland over the next 20 years and the key drivers of, and constraints to, that development. The information is summarised from 22 interviews and is presented in an aggregated and anonymised format to protect confidentiality.
5.1.2 The outputs of the consultation indicated that there was a strong desire for the sustainable development of the seaweed-based sector in Scotland and indeed for Scottish seaweed to become a 'global brand'. Many businesses consulted expressed the desire to source all required raw material from Scotland, in addition to using supply chain companies and services also available within Scotland. It was suggested that the key to scaling up the seaweed-based sector would be to add value in Scotland rather than selling raw material to other countries.
5.1.3 Although various constraints to the development of seaweed cultivation in Scotland were described (see Table 8), in general businesses and wider stakeholders felt that seaweed cultivation had to be part of the sector's future in Scotland, in part because some felt that large-scale harvesting is probably not sustainable, but also to enable diversification of seaweed species available and hence products and end uses.
5.1.4 There was a strong conviction amongst several stakeholders that there is a high demand (within and beyond Scotland) for a consistent supply of high-quality cultivated seaweed e.g. from multinational corporations. However, stakeholders also highlighted the current disconnect between the supply of, and demand for, cultivated seaweed (i.e. that the required supply couldn't be achieved without the demand and vice versa).
5.1.5 In general, established businesses in Scotland that currently use wild harvested resource are interested in cultivating seaweed. Indeed, some have undertaken R&D and/or pilot trials to assess the potential to do so. However, these stakeholders indicated they were not pursuing this further at this time due to cultivation not currently being economically viable, a view shared by many of the stakeholders interviewed.
5.1.6 One stakeholder's opinion was that cultivating seaweed is not currently economically viable without financial support (unless undertaken within a vertically-integrated company in which the value is added in the processing, potentially offsetting the higher cost of the cultivated seaweed). Underlying elements considered to contribute to this barrier included the start-up investment cost, cost of seeded lines (currently costly in Scotland compared to other areas in Europe where the industry is more established e.g. the Netherlands), the labour intensive process (i.e. manual deployment of lines and harvesting), a lack of defined markets for the species which can currently be cultivated, the relatively low value of species currently farmed and the need for R&D to enable cultivation of higher value species (for example Palmaria, Gracilaria).
5.1.7 Several stakeholders consulted felt that economic viability (profitability) could only be achieved through farming at an industrial (large) scale. Such economies of scale would require mechanisation with respect to deployment of seeded lines and harvesting, and hence would require high levels of capital funds/investment. However, some stakeholders felt that such large-scale seaweed farms, with bigger structural capacity, would "bump up" against social licence[24] i.e. not be acceptable to coastal communities. Numerous stakeholders stated that their vision for the sector in Scotland would be for numerous small-scale farms, potentially functioning in a co-operative way. A current initiative is underway in Scotland to form a 'Scottish Seaweed Cooperative'[25] to facilitate co-ordination and collaboration between stakeholders (e.g. cultivators, intermediaries, markets), helping them to scale-up and increase value through processing and to be able to respond to market demand. It was also noted that whilst local communities may be interested in establishing seaweed farms, they would not necessarily have the required technical knowledge and hence would likely need the support of 'intermediaries' with expertise in seaweed cultivation and aquaculture systems.
5.1.8 There was a variety of opinions about the potential future importance of seaweed cultivation for the sector going forward – one opinion was that seaweed cultivation would not replace wild harvesting as a source of raw material, whilst another stakeholder (from outside of Scotland) felt that if sufficient scales of cultivation could be achieved, cultivated raw material may be able to compete with wild harvest sources within 7 to 8 years. Another felt that the focus should be on creating high value products from the wild seaweed that is currently harvested. Indeed, consultation indicated that many stakeholders felt that sector growth in the form of expansion of production of existing seaweed-based products and development of new products could be met by raw material provided through wild harvesting (see Tables 10-13; Section 6).
5.1.9 It was also highlighted that the current wild harvesting businesses that exist in Scotland (on which almost the entire commercial sector is currently based) are important with respect to the socio-economic benefits that they provide e.g. the levels of local employment in remote and island communities. However, the future of this industry was considered to depend upon the proportionate regulation of access to the wild resource (ensuring security of supply) and timely determinations on consent (CES licence) to wild harvest, enabling businesses to plan capital investments and invest in product development research. Stakeholder opinion on current regulation of wild seaweed harvesting included that NatureScot (formerly Scottish Natural Heritage (SNH)) oversight of the process was too restrictive and that more guidance was required around allowable wild harvesting tonnages which appeared to be changeable. There was also concern from a few wider and industry stakeholders that any changes to the regulations around wild harvesting of seaweed (and particularly the mechanical harvesting of seaweed as currently undertaken in some locations) could impact or threaten that sector. One wider stakeholder considered that a clear regulatory process was required, particularly with respect to large-scale wild harvesting.
5.1.10 Table 7 and Table 8 provide summaries of seaweed-business and wider stakeholder views of the key drivers of, and constraints to, the potential future growth of the Scottish seaweed-based industry. Where a driver or constraint is specific to wild harvesting or cultivation it is specified in the tables. The influence of these drivers and constraints on the projected future scenarios is described in Section 6 and discussed further in Sections 8 and 9.
| Driver |
Description |
|---|---|
| The blue economy / circular economy |
Sustainable use of marine resources. Circular economy – interest in use of whole seaweed for multiple products, with no waste (i.e. create value chain in Scotland to use all seaweed) |
| Employment |
Job creation for coastal communities |
| Consumer preference |
Consumer awareness and interest in sustainable sources of healthy food, particularly plant based. |
| Market demand |
Growing demand for seaweed in an increasing variety of products, as well as demand for seaweed by large companies as part of their corporate sustainability goals. Stakeholder perception of the existence of big market demand for a consistent supply and quality of cultivated seaweed |
| Sustainability / environmental impacts (seaweed cultivation) |
Strong desire for sustainable development of the industry. Some stakeholder concerns about the sustainability of large-scale wild harvesting (e.g. of kelp) and regulator concerns about limited UK evidence on impacts. Cultivation of seaweed may be an alternative where larger volumes required, subject to economic viability and environmental impacts |
| Provenance / global brand |
High profile of Scottish food and drink globally would facilitate promoting provenance of Scottish seaweed and in sourcing seaweed cultivated in Scotland for inclusion in products. |
Source: stakeholder consultation
| Constraint |
Description |
|---|---|
| Investment and access to finance |
The seaweed-based sector faces the same challenges as other types of start-up business, except the challenges are exacerbated by seaweed being a novel product, for example in relation to lack of knowledge of seaweed markets. The cost of premises and equipment in the required locations (close to production sites), which are often remote, is a challenge. There is a lack of finance available for equipment and to scale-up. |
| Need for supply chain / infrastructure development |
Certain specialist companies currently used by the sector (e.g. for some forms of packaging or secondary processing) are located outside Scotland. Other difficulties raised included the availability of staff at certain times of the year, the availability of staff with the required skills and the lack of other infrastructure requirements (e.g. landing sites) particularly in remote/island locations. |
| Social licence |
Lack of social licence for the level of wild harvesting required to supply some high value sectors e.g. biorefining of seaweed for multiple high value products, and potential lack of social licence for large-scale cultivation. |
| Regulation and licensing |
Wild harvesting: The future of the industry is dependent on clear guidance and proportionate regulation of access to wild seaweed resources, with timely determination of consent (CES licences) to wild harvest. This would provide the confidence/ability to plan capital investments, develop facilities and invest in science-based product development to create new markets and customers. The current time taken to receive consent can result in the loss of customers. Cultivation: The time taken to receive a marine licence for cultivation was raised as a potential issue for the industry. |
| Economic viability (cultivation) |
Seaweed cultivation is not currently considered economically viable (unless undertaken within a vertically-integrated company in which the value is added in the processing, potentially offsetting the higher cost of the cultivated seaweed). Factors influencing the economic viability were cited as the start-up investment cost, the cost of seeded lines in Scotland (cheap in Europe where supply more developed); the relatively low value of species that can currently be cultivated at sea; the labour intensive process, the large scale of cultivation required to achieve viability (for which there may be a lack of social licence) and the potential to need mechanised seeding and harvesting to achieve these scales. |
| Limited range of species currently cultivated |
Currently only a limited number of seaweeds can be successfully cultivated. R&D is required to enable cultivation of higher value species such as Palmaria palmata. It is not commercially viable to cultivate Laminaria hyperborea for biorefinery purposes as it takes 4-5 years to reach the required growth stage and the sought-after biochemical properties arise from high energy environments in which it naturally occurs. |
| Market supply and demand (cultivation) |
Lack of clarity regarding the markets for the species that can currently be cultivated and the disconnect between potential supply and demand (both projected to be large but the difficulty of one developing without the other) |
| Disease (cultivation) |
Potential problems with disease and pests for cultivated seaweed[26] (particularly monocultures), as has recently caused a decline in seaweed production in Asia. |
| Available marine space for developments (cultivation) |
A potential issue if large-scale farms are to be developed. |
Source: Stakeholder consultation
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