NO NL Micro algae opportunities in aquaculture

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Inventory of Norwegian strategies, instruments and key players that actively develop micro algae business and to identify areas of cooperation, potential partners and strategies that The Netherlands could follow to connect.

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NO NL Micro algae opportunities in aquaculture

  1. 1. JOINED DUTCH-NORWEGIAN BUSINESSOPPORTUNITIES INMicro algae and Nordic AquacultureBY SYTSE YBEMA, SUSTAINOVATE ASSUPPORTED BY MARELIFE BIOMARINE INNOVATION NETWORKOslo, 05 May 2013Commissioned by the Dutch Ministry of Economic Affairs“Programma Internationale Agroketens”AssignmentInventory of Norwegian strategies, instruments and key players that actively develop micro algae business and to identify areas of cooperation,potential partners and strategies that The Netherlands could follow to connect. More info at Sustainovate.com/norway-tradeB U S I N E S SO P P O R T U N I T Y S C A N- Public document-
  2. 2. Table of contentSummary 2Growing global interest in micro-algae based aquafeeds 4Need for increased supply of Omega-3 fatty acids 6Nordic micro algae competence and potentials for aquaculture 7.........................................................................................................Market development & potentials as seen by Nordic countries 8.......................................................................................................................................................................................................Opportunities 10..................................................................................................................................................................................................................Threats 10.......................................................................................................................................................................................................Nordic Needs 10Opening aquaculture feed market for micro algae 11..............................................................................................................................................................Main market uncertainties 11...........................................................................................................................................................Algae production challenges 11..................................................................................................................................Commercialisation bottleneck in the Nordics 12..............................................................................................Recent Norwegian initiatives and contributions to open the market 12...............................................................................................................................................................Development of Knowledge Networks 12..........................................................................................................................................................................Algae commercialisation efforts 13..............................................................................................................................................................Recent workshops / Business meetings 14..............................................................................................................................................Where Dutch competence could fit in 15................................................................................................................................................Aquafeed market to team up with algae industry 16........................................................................................Opportunities for Dutch-Norwegian collaboration - Proposed collaboration strategy 16Used sources 18Appendix I Norwegian algae playing field in a nutshell 19Appendix II Dutch algae playing field in a nutshell 23Micro Algae and Nordic aquaculture - Business opportunities between The Netherlands and Norway Sustainovate AS1
  3. 3. SummaryWith a growing interest in the development of a Norwegian bio-based economy, the Dutch Ministry of EconomicAffairs commissioned this study to identify areas of cooperation, potential partners and strategies between Dutchand Norwegian players in micro algae business for aquafeed. This quick scan demonstrates the current status ofmicro-algae applications to the aquafeed industry; It touches upon potentials, needs but also hurdles for (Dutch)micro algae producers and solution providers to collaborate with the (Norwegian) aquafeed industry.Where Norway is particularly strong in aquaculture and science based knowledge of micro algae, the Netherlands isknown for its commercialisation power in general and is actively developing innovative solutions in micro-algaeproduction. These complementary characteristics could be used to speed up the long awaited breakthrough inusing micro algae (ingredients) in the aquafeed industry. This industry is in need for alternative Omega-3 sourcesnow a growing global food demand has put more pressure on existing Omega-3 (and unsaturated fatty acids andantioxidants ) from wild fish stocks.This report uses the result from the EU Interreg project ‘Blue Biotechnology for Sustainable Innovations’ or ‘BlueBio*’as a basis and has been updated with opinions and facts delivered by several key actors in Norway and TheNetherlands.* Blue Bio is a two-year project within the EU Interreg programme (IVA Kattegat-Skagerrak) that works towards knowledge-based development and integration of research andindustry. The objective of that report has been to analyse how the Nordic countries can best capitalise on its strengths in the light of current and emerging opportunities foralgal R&D, and in the context of international competition.Need and potentials for algae in Nordic aquafeedGlobal food demand is increasing rapidly. Aquaculture, heavily depending on wild fish as supplier of Omega-3 oil,can simply not provide this increasing demand for fish and Omega-3 because wild fish stocks are at the limit of theirexploitation. One fundamental consideration for incorporating micro-algae into fish feed is that algae are the base ofthe aquatic food chains that produce the food resources that fish are adapted to consume.Micro-Algae feeds for aquaculture ("aquafeeds") are currently produced in small amounts by hundreds ofaquaculture operations and some commercial producers. Algae as an alternative seems logic since it containsseveral important components that can be applied in aquaculture: Astaxanthin, vitamins and other micro ingredients,Protein and Omega-3 fatty acids.Algae have considerable potential to contribute to a bio-based economy in the Nordic countries. Both the expertiseand the will exists in the Nordic countries to develop the majority of the opportunities with algae. Norway is theworld largest producer of farmed salmon. The last decade it has also been focused on developing production andmarkets for other species than Atlantic salmon and rainbow trout (mainly cod, halibut and mussels) whichcontributed significantly to the emerging knowledge and experience on micro-algae cultivation.In general, the Nordic countries benefits from an enormous span of expertise that is relevant to algae, but strugglesto capitalise on this since the relevant researchers belong to different communities, which traditionally have not beenin active dialogue.Opening the market: Uncertainties & challenges to overcomeDespite the increasing demand for algae in the (shell)fish farming industry and the increasing number of breedinginitiatives it appears difficult to set up business that produces high quality algae on an industrial scale. TheMicro Algae and Nordic aquaculture - Business opportunities between The Netherlands and Norway Sustainovate AS2
  4. 4. aquaculture sector recognises that algae play a potential important role, but neither party wants to become problemowner or develop solutions for the entire sector. Thus, vital pilots that are needed for maturing this market are beingpostponed. To attract funding, a significant number of the new companies that have been formed make unrealisticclaims about productivities and profits; this threatens the credibility of the field in general. Instead a long innovativeprocess is necessary to be able to scale up the algae production to meet the increasing demand for aquaculturebiomass for many different purposes. It includes technical innovations to reduce costs and increase volumessignificantly but it also concerns market uncertainties and commercialisation.Recent Norwegian initiatives and contributions to open the market are the development of ‘Knowledge Networks’such as the Nordic Algae Network and Algae commercialisation efforts as in the EU funded project Blue Bio and theNord-Østron project. In addition, numerous conferences and workshops and other business meetings actively putthe algae topic high on the agenda.Where Dutch competence could fit in.This report will address how algal business in the Nordic countries may capitalise with the help of Dutch know-how,and stay competitive in a well populated and rapidly moving international field. Several Dutch players in R&D, algaeand related sectors (water, horticulture) are developing promising technologies using particularly closed systems thatcan guarantee high quality algae products and have the scalability to reach industrial scale production needed bythe aquaculture industry. These Dutch stakeholders have the possibility to capture a leading market position ifmatching industrial partners are found. Facilitating this matchmaking is part of this report’s goals.Underlying report describes the Dutch micro-algae playing field in a nutshell and demonstrates that although there isa decreasing trend in Dutch aquaculture, the Dutch sector is now seeking to gain ground again through innovation.Algae cultivation is a relatively new activity in the Netherlands. Many projects started to investigate cultivation ofmicro-algae but only a few focus on (shell)fish farming. Some Dutch companies grow algae on a small scale for anumber of years, focusing on niche markets while others have the ambition to produce on industrial scale.Focus areas in Dutch-Norwegian collaborationIndustry wide challenges to enter the aquafeed market as seen by Dutch MSE’s are straight forward: Building ofindustry trust because currently the products are simply too expensive, the volumes are too low and the productquality to enter the feed market is insufficient. The 2 processes responsible for the high costs are waiting for ainnovative breakthroughs in separation of algae from water and de-watering/drying. Both these processes consumelarge amounts of energy. Upscaling of production forms the main challenge beyond the research and R&D phase inthe industry. Modular based thinking might be the answer to overcome this hurdle. The SME’s recognise that theintegration of algae in fishfeed does not need to go to commodity products at once; instead a phased approachmight build up the needed trust.Facilitating a sense of urgency with large Norwegian aquafeed/aquaculture players could be achieved by ‘injecting’typical Dutch competence in Nordic commercialisation efforts as undertaken by MareLife and the Nordic AlgaeNetwork. Second, an aquafeed pilot project could be developed with Norwegian SME’s that do have a sense ofurgency. Such collaboration would make use of complementary know-how. Third, a Dutch-Norwegian Think Tankcould be formed that can answer crucial questions regarding legal issues, production capacity/expansion, consumerinterest. Such Think Tank could at the same time identify strategists that monitor (global) market- and pricedevelopments.Micro Algae and Nordic aquaculture - Business opportunities between The Netherlands and Norway Sustainovate AS3
  5. 5. Growing global interest in micro-algae based aquafeedsFishmeal is very extensively used in feeds for fish as well as other animals. Now it is becoming increasingly evidentthat such continued exploitation of this natural resource will ultimately become both environmentally andeconomically unsustainable. Various species of micro algae are used as aquaculture feeds. One fundamentalconsideration for incorporating micro-algae into fish feed is that algae are the base of the aquatic food chains thatproduce the food resources that fish are adapted to consume.Growing amount of global playersThere are more than 400 players involved in the micro-algae business or in micro-algae research and development,according to CBDM.T, an international a market and business intelligence company. Approximately 75.2% of thoseare public or private companies and 18.6% are R&D institutions. Due to dynamic financing of companies dedicatedto 3rd generation biofuel (biofuel from micro-algae) and to the development of genetic engineering technologies, thisnumber is expecting to grow steadily. (Source: Myhre)The main market driver at the moment is the transition to a BIO-BASED ECONOMY. Examples of this are theincreasing production of natural astaxanthin compared to the earlier total dominance of chemical pigment from DSM(‘carophyl pink’) and BASF (‘Lucantin pink’) and Nestles promotion on phycocyanin from Spirulina algae in the video"Blue Smarties commercial". The aquafeed market is currently seen as a niche market in Europe but growing rapidly.Only a few algae species exploitedOut of an estimated close to a million micro-algae species, only around 10 are commercially produced at themoment. These species have been selected on the basis of their size, nutritional value, culture easiness andabsence of negative side effects, such as toxicity. Their nutritional value shows a great variability not only amongdifferent species, but also in genetically different populations of the same species (strains).taxon product application Es#mated)produc#on)(t/a)Chlorella vulgaris /Chlorella pyrenoidosabiomassextractshealth food, food supplement,feed, cosmetics2000Spirulina platensis phycocyaninbiomass, extractshealth food, functional foodFeed, cosmetic products3000Dunaliella salina carotenoids,β-carotenehealth food, food supplement,feed, cosmetics1200Nostoc fusiforme biomass health food 600Aphanizomenon flos-aquaebiomass health food 500Haematococcuspluvialiscarotenoidsastaxanthinpharmaceuticalsfeed additives, aquaculture50Odontella aurita EPA, biomass cosmetics, food 20Schizochytrium DHA baby foodUlkenia DHA baby foodSceletenoma life biomass aquacultureNitzschia/ Navicula life biomass aquacultureIsochrysis galbana life biomass,fatty acids aquaculture, animal nutritionNannochloropsis life biomass aquacultureTABLE: APPLICATION AREAS OF MOST IMPORTANT ALGAE SPECIES. AFTER PULZ 2009Micro Algae and Nordic aquaculture - Business opportunities between The Netherlands and Norway Sustainovate AS4
  6. 6. Large volume potentialsMicro-Algae feeds for aquaculture ("aquafeeds") are currently produced in small amounts by hundreds ofaquaculture operations and some commercial producers. These supply micro-algae feeds, typically as a refrigeratedpaste, for use by bivalve, fish, shrimp and other aquaculture markets.  However, costs are high, production systemssmall, and global production of such micro-algae aquaculture feeds is at most a few hundred tons a year. Still, algaeare the largest un-exploited biomass resource, which possess vast potential as resource for an array of differentapplications including ingredients for the aquatic feed industry.Product US$ kg -1 Market Size US$ *106Biomass health food 10 - 80 1. 100functional food 25 – 52 growingfeed additive 10 – 130 fast growingaquaculture 50 – 150 fast growingsoil conditioner >10 promisingPigments astaxanthin 2.500-8.000 >250Pigmentsphycocyanin 500 >15phycoerythrin >10.000 >2Antioxidants beta-carotene >750 >25superoxide dismutase >1.000 promisingtocopherol 30 – 40 stagnantAO-extract 20 – 45 12 – 20ARA 50EPA 300DHA 250PUFA-extracts 30 - 80 10Special products toxins 1 – 3isotopes >5Table: Marked estimation for micro-algal products, after Pulz 2009. NOTE: Lutein is missing in this table.So although the market for aquaculture applications is rapidly growing, high production costs, demanding volumesand fluctuating algae quality keep the market from developing beyond R&D and small scale production.Micro Algae and Nordic aquaculture - Business opportunities between The Netherlands and Norway Sustainovate AS5
  7. 7. Need for increased supply of Omega-3 fatty acidsGlobal food demand is increasing rapidly, as is the consumption of fish and Omega-3 products. Aquaculture, heavilydepending on wild fish as supplier of Omega-3 oil, can simply not provide this increasing demand for fish andOmega-3 because wild fish stocks are at the limit of their exploitation. So new sources for marine fatty acids areurgently needed.The table and figure below indicate a growing global importance of Omega-3 oils with a focus on Asia’s need for fishfeed.A clear example of the need for more Omega-3 products is for example givenin the Norwegian salmon industry:The Norwegian Agricultural Economics Research Institute (NILF) concluded onthe need for increased supply of Omega-3 components in salmon farming:“Insufficient supply of marine oils will change the Salmon Industry” “With 10% Omega-3 fatty acids in fish feed, the industry has 2-3 years to find newsolutions. A reduction in Omega-3 fatty acids to 7,5 %, the industry getsadditional two years. Halving, from 10 to 5 % Omega-3 fatty acids, the criticalunder-coverage will be moved to 2016.”“Although Omega-3 fatty acids requirement in feed for optimal growth ofsalmon is relatively low (1%) , it is added to salmon feed (>7%) mainly toenrich fillets in order to meat eating qualities (feed and fillet levels arecorrelated) because Omega-3 fatty acids in salmon fillet are important forhuman health claims.”Micro-algae as source of Omega-3As alternatives for fish marine oils, plant oil might potentially be available toaquaculture in 5-10 years since genetically modified oils are currently notTABLE: GLOBAL FEED M TONNAGE BY SPECIES (SOURCE: ALLTECH).FIGURE: SIMPLE EXTRAPOLATION OF THE GLOBAL CONSUMPTION OFFINISHED OMEGA-3 FISH OIL. THIS EXTRAPOLATION INDICATES THEPRESSURE THAT HUMAN CONSUMPTION SECTORS WILL PUT ON THE FISHOIL MARKET IN THE COMING YEARS.NILF-REPORT «FØRE VAR» I LAKSENÆRINGEN:TID FOR KOLLEKTIV HÅNDTERING AVUNDERDEKNING AV FISKEOLJE. SOURCE:HTTP://WWW.NILF.NOMicro Algae and Nordic aquaculture - Business opportunities between The Netherlands and Norway Sustainovate AS6
  8. 8. accepted in EU; Microbes as an alternative suggests relatively high prices because of the fermentation process andgenetic modification; Krill, new fish species, other marine organisms form a large potential biomass but is costly tocatch. Also precautionary management policies will not allow heavy harvesting volumes. Algae as an alternativeseems much more logic since it contains several important components that can be applied in aquaculture:1. Astaxanthin, vitamins and other micro ingredients have been on the market for several years and will remain amicro market,2. Protein alternative for fishmeal replacement. This application is relevant, but is experiencing high competitionfrom terrestrial plant protein;3. Omega-3 fatty acids EPA + DHA source to replace fish oil has big potentials. A very large market foraquaculture feeds could be developed for micro-algae biomass containing long chain omega-3 fatty acids, toreplace fish meal and oil, but for this production costs must be reduced from $50-$100 to between $1 and 2/kgof algal biomass (dried or wet).Nordic micro algae competence and potentials for aquacultureGlobal interest in micro-algae is rapidly increasing and the North Sea region may have a competitive advantage whenit comes to knowledge, R&D and innovative aquaculture applications.Algae have considerable potential to contribute to a bio-based economy in the Nordic countries. Both the expertiseand the will exists in the Nordic countries to develop the majority of the opportunities with algae. The Nordiccountries could make a number of key contributions to the global algal field. Its strength in engineering of intensiveaquaculture with highly controlling the production parameters can be transferred and contribute to the developmentof large-scale micro-algae production. Unification of the research community will be an essential step, as will makingboth the commercial world and the international academic arena aware of the value of what it has to offer. TheNordic countries have a wealth of biological expertise to offer to establish algae as part of a bio-based economy,both through high tech approaches to build algae as an industrial biotechnology platform, and by developing algalproducts and services in the concept of integrated bio-refining. This is complemented by extensive ecologicalexpertise that helps to understand and model the role of algae in climate change and develop them as bio-indicatorsfor environmental impact.The Blue Bio project report identified 25 universities and R&Ds working on algal topics while only 7 companies areworking on commercial algae projects in the Nordic countries. The Nordic countries are world leaders in aquacultureand Omega-3 industry in which are suffering from shortage of ingredient source due to the wild fish stock depletion.Micro Algae and Nordic aquaculture - Business opportunities between The Netherlands and Norway Sustainovate AS7
  9. 9. The image below visualises the micro algae R&D playing field as communicated by Jon Aulie, MareLife.See Appendix I for an overview of the Norwegian commercial players.Market development & potentials as seen by Nordic countriesWhile it is essential to be fully aware of the strengths the Nordic countries have to offer, in order to draw informedconclusions it is also valuable to put them in the context of known weaknesses of the general Nordic countries set-up, and to be mindful of both opportunities and threats associated with algal research in the Nordic countries. Tofacilitate this process, an outline SWOT analysis made by the Blue Bio report is given in the table below.Part of BlueBio SWOT AnalysisNordic strengthsILLUSTRATION BY SUSTAINOVATE• World leading aquacultureindustry• World leading aquaculture feedindustry• World leader in aquaculture R&D• World leading Omega-3 industryand R&D• Strong Marine Biotechnologyinfrastructure• Ecological / environmental R&D,especially marine, impacts ofclimate change• Fundamental biological R&D:photosynthesis, physiology,phylogeny, taxonomy, wholeorganism biology, biochemistry,systems/molecular/microbiology, biotechnology• Diversity of research base• International microalgal culturecollections• Focus on integrated systems inapplicationsMicro Algae and Nordic aquaculture - Business opportunities between The Netherlands and Norway Sustainovate AS8
  10. 10. Nordic weaknesses• Lack of cohesion between theconstituent research communities• Small number of people withcombined engineering and biologicalexpertise• Decline in freshwater expertise (e.g.relevant to aquaculture waste watertreatment).• In common with other scientificendeavours: Less flexible inresponding to new opportunities thanUS / BRIC countries; Comparativelypoor track record of successfulcommercialisation of R&D outputs,compared e.g. to USTABLE: OUTLINE SWOT ANALYSIS OF ALGAL RESEARCH IN THE NORDIC COUNTRIES. SOURCE: BLUE BIO REPORTPotentials for other species than salmonA significant contribution to the emerging knowledge and experience on micro-algae cultivation may be addressedto the focus on bringing in new marine species (halibut, turbot, sea bass, sea bream, cod, crustaceans and bivalves)to the aquaculture industry.Micro-Algae for halibut and turbot reproduction dominated the 80-ties and 90-ties while cod, scallop and oysterreproduction have been the main species later on. Cod farming industry was growing until its collapse in 2009 andthere were about 24 small and medium size cod hatcheries consuming around 90 thousands litres of Chlorella spand about 3 thousands litres of Nannochloropsis oculata on its peak. During the 80-ties and 90-ties, while halibutwas focused as new specie, every hatchery had their own micro-algae department producing the necessarybiomass. The cod farming industry had a higher micro-algae biomass requirement and tended to import frozen andlive biomass from Asia (Chlorella sp.) and USA (Nannochloropsis oculata). This turned out to be a business in whicha Norwegian company Micro-Algae AS started to trade imported algae biomass into the cod hatcheries (http://www.micro-algae.no/). Other companies, such as Algaetech Industrier AS and MicroA AS, started to plan productionof wet, live biomass to supply the growing cod farming industry. After the collapse in 2009, there were only about 3or 4 cod hatcheries left and little business in algae.This wealth of knowledge has not been made best use of in the Nordic countries, for two principal reasons inrelation to research funding (Source: BlueBio report):1. A lack of integration of the research community across the breadth of relevant disciplines: this needs to becatalysed by providing funding for multidisciplinary research programmes, where possible linked tocollaborative demonstration sites with industry.2. Progress in the field has been seriously hampered by lack of funding. The Nordic countries are in grave dangerof being marginalised on an international scale, since especially the US and BRIC countries have been and areinvesting heavily in this arena. Unless this situation is remedied, further opportunities will be lost. The qualityand size of the knowledge base is likely to diminish through brain-drain to well-funded RD&D activities abroad.It would lead to first-rate Nordic countries R&D outputs again being commercially exploited mainly abroad, withlittle benefit coming back, and the Nordic countries would be forced to adopt technologies from abroad whichcould and should have been developed nationally.Integration of algal growth with aquaculture promises ecological and economic benefit on a national as well asglobal level, and the Nordic countries research community (especially Nofima, SINTEF, IMR and the universities) iswell placed to increase sustainability of the aquaculture industry.Micro Algae and Nordic aquaculture - Business opportunities between The Netherlands and Norway Sustainovate AS9
  11. 11. In short:Opportunitiesa) Rising prices of fish oil and fish meal due to the aquaculture expansion in relation to fish stock depletionswhile breakthroughs in large-scale algal production may turn micro-algae to be a sustainable source forOmega-3 and aquaculture feedb) Increased availability of micro-algae expertise from countries suffering high rate of unemployment due toeconomic crisesc) Increase sustainability of CO2/heat/waste water producing industries and aquaculture through integratedalgal growth systems and bioremediationd) Exploit benefits if coordinated interdisciplinary work, if Nordic countries research community can be unitede) Increase collaboration on international scale, access international fundingThreatsa) Loss of lead in current strengths due to being diluted / crowded out by well-funded internationalcompetition (especially US and BRIC countries; loss of funding for the Carbon Trust ABC is an example ofhow expertise and momentum is being wasted through lack of support)b) Loss of expertise: through staff retiring and insufficient numbers of new people entering the field (especiallyin traditional disciplines such as taxonomy)c) First-rate Nordic R&D outputs being commercially exploited mainly abroad, with little benefit coming backto Nordic countriesd) Disappointment of unrealistic expectations may lead to blindness in funding bodies, politicians, businessand the public for real opportunities algae offer.Nordic NeedsSome key recommendations have been made in the Blue Bio project report:a) The Nordic countries needs to develop a focused and integrated approach to algae.b) Algal production should follow integrated approaches and be developed in demonstration projects.c) High value products from algae should have higher priority than fuel production.d) The Nordic countries have world-class algal expertise which has suffered from scarce and dispersefunding; strategic and linked-up funding packages with industry input are required to move forward.In addition:e) The Nordic countries with emphasis on Norway need expertise in commercialisation of promising conceptsand applications.Micro Algae and Nordic aquaculture - Business opportunities between The Netherlands and Norway Sustainovate AS10
  12. 12. Opening aquaculture feed market for micro algaeDespite the increasing demand for algae in the fish and shellfish farming industry and the increasing number ofbreeding initiatives it appears difficult to set up business that produces high quality algae on an industrial scale asexplained above. The aquaculture sector recognises that algae play a potential important role, but neither partywants to become problem owner or develop solutions for the entire sector. Thus, vital pilots that are needed formaturing this market are being postponed. To attract funding, a significant number of the new companies that havebeen formed make unrealistic claims about productivities and profits; this threatens the credibility of the field ingeneral.Main market uncertaintiesIndustrial scale utilisation of marine algae requires intensive development of growth, harvest and conditioningsystems that secure reliable delivery of large amount of biomass at the right time, -quality and -condition. A longinnovative process is necessary to be able to scale up the algae production to meet the increasing demand foraquaculture biomass for many different purposes.The main questions regarding opening the aquaculture feeds market for algae derived products are:1. Which ingredients can be sourced from industrial micro-algae production?2. Which barriers and challenges need to be resolved to secure market entry both technical and business-wise?3. How to develop the market to algal ingredients?4. What is needed to start commercial algae production for use in shellfish and fish farming5. Who are potential investors in this field?6. How to reduce delay due to registration and legislation? This route is costly ad time consuming. Thegovernment could facilitate and allow temporary exemption of the use of certain algae for pilot/testpurposes.Algae production challengesReducing costs and increasing volumes to compete with fish oilThe Algae Industry calls for cost reduction. In the market for aquaculture bulk production of high quality algae,reduction of production costs is vital as these products must compete with already existing raw materials. The priceof algal oil should approach the price level of commodity fish oils before algae can be used for commercialproduction of feeds at large scale. In the past 10 years the industry has reduced the production costs of severalhundreds of Euro per kilo to € 20,- (low quality) - € 80-120 (high quality). To compete with other fish feed, theeconomical viable price should be ten-fold lower than currently! Possible solutions put forward in the Oslo (MarchMicro Algae and Nordic aquaculture - Business opportunities between The Netherlands and Norway Sustainovate AS11
  13. 13. 2012) open discussion were related to energy reduction, reduction of hectares (work in height instead of thehectares) and finding methods where no light is needed.In order to penetrate the fish feed market, large volumes are needed (ambitions must be in the area of producingminimum 100.000 tons of fish oils equivalents).Keeping algae quality at constant levelIt seems that a constant quality level of micro algae is an important issue for farming of juveniles (now up to 80%dies in the Dutch shellfish industry due to poor diet!). many open system algae producers are not able to maintainthis constant quality level.Commercialisation bottleneck in the NordicsThere might be several reasons for the lack of commercialisation of this wealth of algal expertise in the NordicCountries:Although aquafeed companies are willing to explore including algae (components) into their aquafeed they often donot have the in-house competence to judge which technology or algae producing company is future proof. In thiscase neutral institutions such as the Norwegian ‘Lipid Forum’ or ‘Algae Network’ might take a guiding role.Another bottleneck in the Nordic countries put forward in the Blue Bio report is presented by the fact thatresearchers often are still not too familiar with how to take brilliant ideas, inventions and developments further:starting with appropriate IP protection combined with identifying industries for which the IP is relevant, and then bybuilding teams with the right mix of skills to move to the next stage. An increased awareness among researchers ofthe relevance of their expertise to commercial applications, and of the opportunities that could arise from takingtheir research outputs further through development, would accelerate the flow of algal R&D into novelbiotechnological applications. Other helpful skills include knowing when to draw in other expertise (e.g. businessknow-how), and when to let go – understandably scientists who have developed a new process or product tend tobe keen to retain control; however, to get to the next level, business and marketing experts increasingly need to bein charge if commercialisation is to be successful.Lack of integration of the research community across relevant disciplines: this needs to be catalysed by providingfunding for multidisciplinary research programmes, where possible linked to collaborative demonstration sites withindustry. Progress in the field has been seriously hampered by lack of public funding. The Nordic countries are indanger of being marginalised on an international scale, since especially the US and BRIC countries have been andare investing heavily in this arena.Recent Norwegian initiatives and contributions to open the marketDevelopment of Knowledge NetworksNordic Algae Network is a network project with focus on a majority of industrial partners in dialogue with researchinstitutions. The network is to increase the ability of the involved industries to evaluate their business opportunitiesMicro Algae and Nordic aquaculture - Business opportunities between The Netherlands and Norway Sustainovate AS12
  14. 14. for production based on algae raw materials, and the network is to strengthen the cooperation and sparringbetween the Nordic partners. In addition the newsletters and the website will give a large network for algae activitiesin the North Atlantic hemisphere including England, Scotland, Ireland, Faroe Island, Greenland and the east coast ofCanada.Participants:• Iceland: Matis, Marinox, Blue Lagoon International, Green in Blue, Islensk Bláskel, Nýland Biotech.• Norway: University of Norway (NUL), Algetech Industrier A/S, Due Miljø A/S, Biopharmia, MareLife A/S, Norges Vel, AstaNovo A/S• Sweden: Tångbrödsspecialisten, Evertsjöbod, Marin Biogas AB, N-Research, Chalmers University of Technology• Denmark: Danish Technological Institute, Havets Hus, Orbicon A/S, Danish Shellfish CentreWorkshops held (summaries and presentations can be found online):Workshop in Iceland 15. May 2012Workshop in Denmark 20. September 2012Workshop in Norway 15. November 2012Workshop in Sweden 28. February 2013Conference in Grenå, Denmark 09. -10. October 2013Useful link containing presentations: http://www.nordicinnovation.org/projects/marine-innovation-projects/nordic-algae-network/nordic-algae-network-workshops/Algae commercialisation effortsKey questions that are being addressed within Norwegian micro-algae communities are:• Which nutritional components can be sourced from industrial micro-algae production ?• Which barriers and challenges need to be resolved to secure market entry both technical and business-wise?!• How open is the market to algal ingredients?• What is needed to start commercial algae production for use in shellfish and fish farming• Who are potential investors in this field?Two desk studies on the potentials for using micro algae in aquaculture processes are in writing: one by the EUproject “Blue Bio” and another by the Centre for Applied Biotechnology that has reported about micro-algaestrategies for Norway towards omega-3 rich biomass for aquafeed production. The latter report is only preliminary atthis stage, and was intended only for the steering committee at the time of writing. The final report will be completedin April 2013.The Blue Bio project clearly focusses on commercialising scientific expertise. Blue Bio commissioned this study toget a picture of the micro-algae players for the Nordic countries. A brief analyses has been performed on how theNordic countries best can capitalise on its strengths in the light of current and emerging opportunities for algal R&D,and in the context of international competition.Based on the Blue Bio analyses, there are 25 universities and R&Ds identified working on algal topics while only 7companies are working on commercial algae projects in the Nordic countries. It is concluded that Academia in theNordic countries has great expertise in the environmental and ecological sectors for both micro-algae, especially(but not exclusively) in the marine sector, however there is no great business activity related to algae identified. AMicro Algae and Nordic aquaculture - Business opportunities between The Netherlands and Norway Sustainovate AS13
  15. 15. long innovative process is still necessary to be able to scale up the algae production to meet the increasing fishfarming demands.The study shows that the Nordic countries has a wealth of biological expertise to offer to establish algae as part of abio-based economy, both through high tech approaches to build algae as an industrial biotechnology platform, andby developing algal products and services in the concept of integrated bio-refining. This is complemented byextensive ecological expertise that helps to understand and model the role of algae in climate change and developthem as bio-indicators for environmental impact.Nord-Ostron project is a cooperation between Universitet i Gøteborg, Skjellsenteret i Danmark, NorwegianUniversity of Life Sciences and an oyster producer. Its task is to find a good way to produce micro-algae as food foroyster larvae.Recent workshops / Business meetingsOCT 2011 - AquaNor 2011.Successful algae seminar by MareLife and MARING FORUM FHL, hosted by SINTEF Fisheries &aquaculture under AquaNor 2011. 50-60 attendees who valued listening to experts along the whole valuechain from algae biology, via production and scaling to market potentials in various segments. The seminarwas also supported and attended by the EU Interreg IVA-funded project Blue Bio Open Innovation “Blåbioteknikk”. The successful seminar finalised with a brief strategic discussion along the maturity of thealgae production technology together with markets potentials of the various segments, here with emphasison omega-3 in fish feeds and human nutraceutica.MAR 2012 - NASF 2012.First open discussion with the salmon industry held at NASF conference, Oslo 2012. Open discussionwhere Dutch and Norwegian stakeholders discussed their ideas openly without having to hold back. Whatwill happen in the near future, how can challenges be solved and what do we need for that? Invitedaudience: Fish breeding / Fish farmers / processors, feed manufacturers and solution providers workingwith this subject or seriously interested in long term collaborations. The meeting was held during the annualNorth Atlantic Seafood Forum. Participants were: Marine Harvest, Salmones Friosur (Chile), EWOS Group,Phycom BV, NiRi AS, University of Bergen, Norwegian University of Life Science, Innovation Norway,InnovatieNetwerk, AlgaePARC-Wageningen University.The main challenge regarding the marine sector that were discussed:“How open is the market to algal ingredients?”“Which barriers and challenges need to be resolved to secure market entry both technical andbusiness-wise?”JUN 2012 - GreenGrowthNordictook place in Trondheim and gathered interested parties from both the green and blue sector to identify anddiscuss the green growth potential of food production sectors, including aquaculture, fisheries andagriculture, and the links between these sectors. Algae were discussed in a separate seminar. The seminarMicro Algae and Nordic aquaculture - Business opportunities between The Netherlands and Norway Sustainovate AS14
  16. 16. was part of the summer meeting arranged by the Council of Ministers for Fisheries and Aquaculture,Agriculture, Food and Forestry. The goal was to increase sustainable and competitive production of food,feed, construction materials, bio-energy and innovative new products on shore as well as off shore. Readmore on: http://www.greengrowthnordic.noSEP 2012 - Conference ‘Macro algae from research to industry - in a Nordic perspective’.This was the 2nd Danish Algae Conference and workshop. This year the focus of the conference was theNordic perspective on “Macro algae from research to industry”. Four key topics were addressed inindividual sessions including Animal feed and proteins. The second day a workshop on macro- and microalgae was held in cooperation with the project “Nordic Algae Network” under Nordic Innovation ́s NordicMarine Innovation Programme.NOV 2012 - Algae workshop at the Norwegian University of Life Sciences.Organised by Nordic Algae network and BlueBio. The workshop focussed on the potential for industrial useof micro-algae and macro-algae in the Nordic countries. The workshop was held in English.NOV 2012 - Seminar on Novel Sources of Omega-3 for Food and Feed, Copenhagen, Denmark.The seminar was held in cooperation with Nordiska Lipidforum and Eurofed Lipid, division for MarineLipids. The seminar dealt with two topics: 1) Production of novel sources of Omega-3, including GMO and2) Use of novel sources of Omega-3 in feed, food and pharma.Where Dutch competence could fit inThe next chapter will address how algal business in the Nordic countries may capitalise with the help of Dutch know-how, and stay competitive in a well populated and rapidly moving international field. Several Dutch players in R&D,algae and related sectors (water, horticulture) are developing promising technologies using particularly closedsystems that can guarantee high quality algae products and have the scalability to reach industrial scale productionneeded by the aquaculture industry. These Dutch stakeholders have the possibility to capture a leading marketposition if matching industrial partners are found.Although there is increasing global aquaculture is grown, there is remarkable reverse trend in the Netherlands. Thishas a reason, namely that the Dutch growers often think not to be able to compete with Asian competitors. TheDutch sector however is now seeking to gain ground again through innovation. Algae cultivation is a relatively newactivity in the Netherlands. Many projects started to investigate cultivation of micro-algae but only a few focus on(shell)fish farming. Some Dutch companies grow algae on a small scale for a number of years, focusing on nichemarkets while others have the ambition to produce on industrial scale.See Appendix II for an overview of the Dutch players.Micro Algae and Nordic aquaculture - Business opportunities between The Netherlands and Norway Sustainovate AS15
  17. 17. Aquafeed market to team up with algae industryThe gapAlgae products are currently positioned as niche products but have the potential to become commodity products,also in aquafeed. The aquaculture sector recognises that algae biomass could play an important role as a feedsource in the near future. For algae biomass to become a commodity product, algae producers need to meet threemain criteria:• production upscaling to be able to provide multi-kilotons biomass• production costs and market prices need to be reduced• quality of the biomass has to be improved and should at least meet international standardsPreviously some enterprises such as SBAE (Belgium) and Ingrepro (Netherlands) have supplied algae to the fishfeedindustry but had to quit these activities. The gap between current technologies and the demands of the aquafeedindustry showed out to be unbridgeable. With this status quo, vital pilots are being postponed.The bridgeTo bridge that gap a phased development of technologies together with products could build a solid foundation forboth industries. The pyramid relation between market size and product prices can not be started at the bottom butat the top gradually but steadily going to the base of the pyramid. For example: it might be impossible to integratealgae as a commodity protein source in fishfeed with adequate prices, volumes and quality at once. Biofuel,wastewater treatment, animal feeds all make the lower part of the value pyramid with little margins. Products at thetop of the pyramid, such as astaxanthin, are costly and produced and required in smaller volumes. An intermediateproduct in the pyramid could be omega-3 products derived from algae. Here volumes can be reasonable as are theprices. Starting with product-technology combinations higher in the pyramid forces development, acceptance andsteady integration of both industries. To catalyse this process and bridge the gap local, national and Europeangovernmental departments could act as a strong facilitator.Opportunities for Dutch-Norwegian collaboration - Proposed collaboration strategyThe proposed collaboration strategy takes into consideration that a market needs to be developed but that ongoinginitiatives in an with the Nordics should be exploited. Recently it was suggested by both Norwegian and Dutchplayers that an entrance of the market through the Omega-3 industry would be a logic first step that seems muchmore manageable.Proposed Track 1 - Facilitate sense of urgency with large Norwegian aquafeed/aquaculture players• Relevance / Need: Sense of urgency with aquaculture industry players. This is the most crucial requirement. Algaeproducers don’t see themselves as problem owners and realise that it’s pointless to impose any solutions inadvance. With soya it took about 15 years for it to enter the market on industrial scale. With nowadays rapidtechnology advances it will not take that long with algae but the sense of urgency seems not to exist withNorwegian fish producers. Dutch SME’s clearly indicate that without a strong sense of urgency the Norwegianaquafeed market is not interesting. Organisations and innovation networks such as MareLife (marelife.org) and theMicro Algae and Nordic aquaculture - Business opportunities between The Netherlands and Norway Sustainovate AS16
  18. 18. Nordic Algae Network (nordicinnovation.org/nordicalgae) are making significant efforts to demonstrate the globalneeds and leading role that Norway can play when it comes to global aquaculture solutions. These efforts shouldcontribute to the sense of urgency.• Activity:• Deliver active input to Nordic dialogues that should lead to a sense of urgency within the aquacultureindustry: strategic thoughts. Involved could be all Dutch players mentioned in this report.• Continuation of open dialogue between Dutch micro algae consortium and EWOS. This would be a logicfollow-up of the business meeting at NASF 2012 joined by Phycom BV in 2012.Proposed Track 2 - Initial contact with medium sized aquafeed/aquaculture players and pilot projectassessmentConnecting to Nordic think tanks and finding appropriate market strategists• Relevance / Needs: There is a need for think tanks that can answer crucial questions regarding legal issues,production capacity/expansion, consumer interest (e.g. salmon colour shift with algae based feeds). At the sametime there is a strong demand for strategists that monitor (global) market- and price developments as describedearlier in this chapter.• Activity: Formation of a Dutch-Norwegian Think Tank starting with involving the leaders of both MareLife andNordic Algae networks.Developing a aquafeed pilot project with smaller companies that do have a sense of urgency• Relevance / Need: Given that several smaller fish producers in Norway do have a sense of urgency and feel thattheir unique selling point lies within controlled sustainable aquaculture with a typical local or regional appeal. Apilot on algae products would fit their needs and would be easier to realise than with larger, less flexible fishfarming companies.• Activity: Assess a collaboration / pilot project between Dutch micro algae consortium focussing on closedproduction systems (for example Phycom, LGem and Algaecom) and smaller individual salmon players.Norwegian players such as united in the Salmon Group will be asked for their interest to connect to Dutch playersbased on the underlying report. Interest could be in algae for aquafeed or opportunities for waste water treatment:an additional business model for environmental income. There is a need for product specifications: What are thefeed specific algae needs? End products could be Astaxanthin, isolate, protein, Omega-3 fatty acids or evencomplete algae. If proteins are required it might be more efficient to obtain those from for example soya. Theaction here could be a specific business meeting with focus on concrete pilots. There are 2 options for suchpilots: partnership or solution provider. The development of a pilot could for example be phased whereby in thefirst stage costly nutrients in fish feed such as astaxanthin and omega-3 fatty acids can be implemented, in thesecond phase mineral acids in combination with antioxidants and fatty acids can be replaced and in the last stagealso the protein. Each phase already has its own market and could run parallel to a reduction in costs and volumeexpansion. N.B. The Salmon Group is involved in micro-algae activities and has communicated interest in Dutch players / expertise. A pilot study on integrated macroalgae (seaweed) salmon farming with the Dutch Hortimare BV already exists and this salmon-kelp concept recently won an innovation prize at the 2013 North AtlanticSeafood Forum (NASF) in Bergen, Norway.Micro Algae and Nordic aquaculture - Business opportunities between The Netherlands and Norway Sustainovate AS17
  19. 19. Used sources• Blue Bio project report: Microalgae – A market analysis carried out as part of the Interreg KASK IVA project: BlueBiotechnology for Sustainable Innovations, “Blue Bio”, January 2013.• Personal comments from Hans Kleivdal (University of Bergen), Jon Aulie (MARING Forum FHL) and Øystein Lie(MareLife).• Presentation ‘Macro- and microalgae in Norway, with assessments of commercialisation, markets andprofitability’ (Nordic Algae Network Workshop on Iceland, by MATIS 15th of May 2012), presented by AnneMugaas• Microalgae Market and Application Outlook Report (http://www.microalgae-market.com)• http://www.greengrowthnordic.no• NILF-report «Føre var» i laksenæringen: Tid for kollektiv håndtering av underdekning av fiskeolje. Source: http://www.nilf.no• http://www.nordicinnovation.org/projects/marine-innovation-projects/nordic-algae-network/nordic-algae-network-workshops/• http://marelife.org/news/top-headlines/232-algae-for-fish-feed-and-supplements.html• http://www.fiskeridir.no/english/statistics/norwegian-aquacultureMicro Algae and Nordic aquaculture - Business opportunities between The Netherlands and Norway Sustainovate AS18
  20. 20. Appendix I Norwegian algae playing field in a nutshellCommercial players / potential clientsAquacultureNorway is the world largest producer of farmed salmon. Since the start of the 19070s there has been a consistentlystrong growth in production. The last decade it has also been focused on developing production and markets forother species than Atlantic salmon and rainbow trout (mainly cod, halibut and mussels). The Norwegian coastlinenow hosts an enormous amount of sites in seawater (per 31 December 2011: 1020 (salmon/trout), 163 (other fish),281 (shell fish)).As described earlier the salmon/sea trout industry is growing rapidly and creates a interesting potential market forthe algae players as illustrated in the images below.SOURCE: ‘KEY FIGURES FROM THE NORWEGIAN AQUACULTURE INDUSTRY’ PROVIDED BY NORWEGIAN DIRECTORATE OF FISHERIES.Among the largest are Marine Harvest ASA, once founded by the Dutch ‘Unilever’, produces Atlantic salmon, halibutand white fish. The group has a share of between 25 and 30% of the global salmon and trout market, making it theworlds largest company in the sector. The company has an integrated value chain, with the company making itsown broodstock in freshwater, followed by growth and maturing in seawater. In both processes algae can playsignificant roles. Earlier in 2012 Marine Harvest stated that it had no R&D resources available for setting up a pilotproject on algae for fish feed; Lerøy Seafood Group is the leading exporter of seafood from Norway and is inbusiness of meeting the demand for food and culinary experiences in Norway and internationally by supplyingseafood products through selected distributors to producers, institutional households and consumers. The GroupsMicro Algae and Nordic aquaculture - Business opportunities between The Netherlands and Norway Sustainovate AS19
  21. 21. core activities are distribution, sale and marketing of seafood, processing of seafood, production of salmon, troutand other species, as well as product development. The Group operates through subsidiaries in Norway, Sweden,France and Portugal and through a network of sales offices that ensure its presence in the most important markets;Cermaq ASA is a Norwegian fish farm and fish feed company. The company is owned 43.5% by the Government ofNorway and is listed on Oslo Stock Exchange.The Salmon Group is the worlds largest network of small, family-owned farming company. It provides service for 44shareholders which altogether manages 100 licenses for salmon and trout along the Norwegian coast, andproduction of ca. 46.7 million smolts. Together with dealers they are owners of feed, vaccines, assurances and othercommon solution providers. Feed companiesAquafeed producersNorways four largest fish feed manufacturers are BioMar, EWOS, Skretting and PolarFeed. Skretting is the world’slargest producer of feeds for farmed fish. Skretting is a wholly owned subsidiary of the Nutreco feed group, which islisted on the stock exchange in the Netherlands. In terms of algae use the company has positioned itself asconservative; The BioMar group is one of the leading suppliers of high performance fish feed to the aquacultureindustry. Its main business areas are feed for salmon and trout in Norway, the United Kingdom, and Chile, and feedfor trout, eel, sea-bass, and sea-bream in Continental Europe. Roughly one out of four farmed fish produced inEurope and Chile are fed with BioMar fish feed. Worldwide the BioMar Group supplies feed to around 60 countriesand to more than 25 different fish species. BioMar fish feed types cover the full life cycle of the fish including larvaefeed, fry feed, smolt feed, grower feed, and brood stock feed. EWOS is a business division of Cermaq ASA.Algae production (alphabetical order)Algalif AS, a Norwegian company that is planning large scale micro-algae production in Norway and Iceland. Theycombine their experience on horticultural light (Gavita AS) with the development of photo-bioreactor (PBR)technology (www.algalif.com).Algetech Industrier AS: Algetech AS (1998), has during year 2008 delivered live micro-algae biomass to the cod(Gadus Morhua) juvenile producers in Norway as well as built up the organisation and distribution channels for theproduct. ALGE TECH Industries utilises closed tubular fotobioreaktorer (PBR) in the production of micro-algae. Afterthe collapse in 2009, there were only about 3 or 4 cod hatcheries left.Biopharmia AS: Biopharmia AS has exclusive rights reserved to the Accordion foto-bioreaktor worldwide. Itstechnology enables the industrial production of high quality products such as omega-3, EPA / DHA etc., astaxanthin,minerals, vitamins, carbohydrates, energy, etc.. from micro-algae. Spirulina (eg. spirulina platensis) - eg.: byBiopharmia AS with patent in Norway on bioreactor Accordion, for food supplements (Omega-3), CO2 capture trials,animal feed - much demanded and sold at high prices (incl. against malnutrition internationally).BM Energy Group and AstaNovo AS have been focusing in large scale production of Haematococcus pluviailis,however, today they have turned the focus on algal EPA and DHA production (http://www.bmeg.no/index.html andhttp://www.astanovo.com/). Micro-Algae production for own markets is assessed as profitable.MicroA AS, Tananger, Rogaland – a Norwegian company that aims to succeed to mass produce micro algae. MicroAwas established in 2007 by local entrepreneurs and investors with the purpose of producing “micro-Micro Algae and Nordic aquaculture - Business opportunities between The Netherlands and Norway Sustainovate AS20
  22. 22. algaepaste” (lived feed) for the cod juveniles farming industry in Norway. MicroA decided to end this project in 2009due to the market collapse. The MicroAs previous patented photo-bioreactor was quite small (60-70 litre volume)and had technical limitations with regard to scalability. This project gave MicroA valuable experience in cultivationand harvesting of micro-algae and led to the best “algae match” for rotifer production. MicroA made a new inventionin 2009 showing promising results with regards to scaling up algae production. Administration and laboratoryfacilities are located in Tananger and temporary greenhouse is installed at Sola (www.microa.no). MicroA has apatented large-scale photo bioreactor, a test centre of 300 m2 greenhouse area with bioreactors and cooperateswith EWOS Innovation (micro algae as fish feed) and Glycomar Ltd. (Production of high-value algae for thepharmaceutical industry). Private money 20 mill. NOK and Innovation Norway 10 mill. NOK.Niri AS, an innovative company that is rolling out a land-based integrated fish farming that includes micro algaeproduction;Promar AS was established in year 2000 to pursue Intravision’s research on a production technology for micro-algae. Using narrow bandwidth light in a reactor designed for efficient light transfer and optimal growth conditions,Promar AS will deliver micro-algae-based high value compounds to a variety of market segments (http://www.intravision.no/pages/promar_about.asp?nr=59).Statoil (Børre Tore Børresen) cultivation and processing of wild grown algae, typically algae which grow attached tosurfaces.  Collaboration with US partners, like College of William and Mary and Virginia Institute of Marine Sciencesand University of Arkansas.AstaReal AB (former BioReal AB). The Swedish company was founded 25 years ago in Uppsala and is today ownedby Fuji Chemical Industry CO, Japan. AstaReal is a research based biotech company, dedicated to the production,research and marketing of natural astaxanthin. They were the first to produce natural astaxanthin commercially fromthe micro-algae Haematococcus pluviailis. They have developed a unique cultivation method to yield the highestand purest form available of natural astaxanthin and offer both bulk ingredients for use in feed, food and dietarysupplements and retail products based on natural astaxanthin (www.bioreal.se).Simris Alg AB is a Swedish company establishing a large scale greenhouse plant for micro-algae cultivation fromwhich they intend to develop unique health products, food and feed supplements. The company is located in sunnyand marine area at Hammenhög Österlen. The algae facilities will consist of 2000 square meter greenhouse and thewarehouse of another 700 square meters will house new laboratory. Products from the algae facility, such asOmega-3, are predicted to be available from 2013.Algae R&DIn general, the Nordic countries benefits from an enormous span of expertise that is relevant to algae, but strugglesto capitalise on this since the relevant researchers belong to different communities, which traditionally have not beenin active dialogue.Academia in the Nordic countries has great expertise in the environmental and ecological sectors for both micro-algae, especially in the marine sector. Fundamental biology is also a key strength; major breakthroughs inphotosynthesis research have been made in the Nordic countries, and a wealth of experience exists in taxonomy,physiology, metabolism and biochemistry of algae. To increase the impact of algal expertise in the Nordic countries,the Nordic countries believe it is important to connect together the various research elements that are needed toprogress the outputs of fundamental research onwards into applications (Source: Blue Bio report).Micro Algae and Nordic aquaculture - Business opportunities between The Netherlands and Norway Sustainovate AS21
  23. 23. The main contributors of the mass production of micro-algae knowledge and experience in the Norwegianaquaculture have been the University of Bergen and the Institute of Marine Research (IMR) together with theNorwegian University of Science and Technology (NTNU) and SINTEF as well as University of Tromsø, University ofLife Sciences, Akvaplan-NIVA, University of Oslo, Aquaculture Protein Center and NOFIMA.The following universities educate people with master/doctor scientific degrees related to micro algae:- University in Tromsø.- NTNU in Trondheim- University in Bergen- University in Agder.- University in Stavanger- University in Oslo- University of ÅssCO2BIO is an innovation network of participants from industry and research. The network is organised as acompany where Salmon Group, Grieg Seafood, EWOS, BTO and NHIL are shareholders. CO2BIO AS wasestablished in 2011. The companys objective is to develop new profitable business on the basis of available CO2capture at Mongstad. The first goal to establish a national pilot plant for the production of omega-3 rich algaebiomass and to conduct research projects in order to develop the entire value chain. The experience from the pilotphase may trigger the creation of large-scale production at Mongstad. The pilot plant is scheduled for completion in2013, the estimated cost is probably 11 mill (http://co2bio.no/).Algro Freberg research institute. Arnstein Freberg established a pilot PBR production in a greenhouse in Lena inOppland county in order to run R&D tasks. This establishment is based on his experience from micro-algae biomassproduction studies in the vertical tubular PBR Biofence system at the University of Life Sciences (UMB) togetherwith prof. Hans R. Gislerød.Micro Algae and Nordic aquaculture - Business opportunities between The Netherlands and Norway Sustainovate AS22
  24. 24. Appendix II Dutch algae playing field in a nutshellIndustrial feed/food companiesNutreco (Skretting), One of the two divisions of the international feed giant Nutreco produces feedfor aquaculture. Skretting, the division of Nutreco fish feed, is the largest producer of salmon feedthe world and has a leading position in feed for other fish species. Skretting has productionfacilities in all major market regions. Stavanger, Norway, hosts the so-called center of excellence forR&D activities of Skretting. The goal is to be not dependent on (the availability of) fish meal in the fish feedcomposition. Skretting believes that micro-algae and marine plants are to substitute fish parts of fishmeal and fishoil components.Unilever (Solazyme). Solrazyme is a renewable oil and bioproducts company that has signed aresearch and development deal with the Dutch Unilever in 2010 to develop an algae-based oilthat can be used in its soaps and other personal care products. This follows a year-longcollaboration between the two companies that yielded successful tests of renewable algal oils inUnilever product formulations. The exposure is mainly about biofuels but other products are slowly introduced in themargins of the market. Recently opened a large new plant probably to become more active in food and feedindustry.SME’sPhycoms proprietary algae cultivation and production process is very innovative. It belongs tothe absolute world top and receives increasing (inter)national interest. Phycom thanks itsuccess to the unique cultivation process to produce algae strains, which are very rich inessential nutrients and among the highest hygienic standards. Phycom is currently exploring the aquaculture marketand needs. Current production: 60-70 thousand liter algae plant which will be upscaled to produce a daily dry-weight of 200kg. One of the key strategies of the company is the launch of spinoff activities that target a specificmarket segments. The idea behind this is simple: the structure, legal aspects and marketing of the company needsto be in line with the demand of the specific client group. For example, in the aquafeed industry Intellectual Propertyrights are crucial and requires a total different business model than in for example cosmetics.Aquaphyto. There is little to no public news available around this enterprise. Shellfish producer‘Koninklijke Prins & Dingemanse’ in collaboration with Aquaphyto B.V. is farming algae to feedits mussel larvae. It’s production is solely for internal use. AquaPhyto BV is an innovativecompany specialised in production of micro-algal biomass with applications of algal mass cultures such as thepolishing of wastewater and the production of bio-fuels and biomass for aquaculture.Martek Bioscience Corporation / DSM. American company that was taken over by DSM for 1billion dollar. It’s a large commercial enterprise focussing entirely on baby food using DHAproduction from Crypthecodinium cohnii.Algaecom. This enterprise produces algae in closed systems on open fields. It’s managementsees many innovative opportunities and understands the strategy to think from a marketperspective. Together with Phycom the company is putting significant efforts in getting more safeMicro Algae and Nordic aquaculture - Business opportunities between The Netherlands and Norway Sustainovate AS23
  25. 25. algae registered in the EU. Upscaling and cost control will most likely be a serious challenge for this company.LGem also serves a niche market by producing solely nanochloropsis to the American healthproduct industry with an annual turnover of around 1.5 million EUR. Economical viable. Thiscompany produces algae in three closed cultivation systems of flexible tubes. LGem delivers algaeproducts especially to the dietary supplement industry, but also to fish farmers that cultivate fishlarvae by using algae. The company makes a good partner when it comes to technology development.Algae Food & Fuel (AF&F) originates from a dairy farm (producing cow milk) where algae wereintroduced to get rid of waste streams. The company now designs, builds, sells and installs systemsmainly for the agricultural industry. The use of innovative technologies for algae growth, processcontrol and harvesting results in unique scalable systems which are cost efficient, highly productive and improve thestability of algae based processes. Algae Food & Fuel creates effective systems by using local resources for algaegrowth. These resources, that would normally be seen as waste streams, are the input of a process that results in aprofitable biomass.R&D InstitutionsAlgaePARC (Wageningen University & Research Center) is a R&Dconsortium that consists of 18 companies and the university, keepingsmall and medium sized enterprises at distance. The latter is due to afinance / investment construction that is not appealing to SME’s. Theconsortium focusses on deriving ingredients from algae and optimisedfarming. The main reason for the large commercial partners to participateis most likely to be among the first to profit from any positive R&D results.Although AlgaePARC has demonstrated several solutions for efficientalgae production (e.g. double glass plates) it seems so far unlikely thatthese systems can be upscaled to industrial level.Micro Algae and Nordic aquaculture - Business opportunities between The Netherlands and Norway Sustainovate AS24

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