Iceland’s fish farming saga is on the verge of an exciting new chapter.

A new force in Atlantic salmon farming is starting to make its presence felt on the world stage: Iceland.

From being a mere bit player only a few years ago, the country is fast moving up the aquaculture ladder.

Iceland’s aquaculture industry took a major step forward last month when Samherji, the country’s largest conventional fishing and seafood processing company, unveiled a £263m plan to build a major land based salmon farm complex on the coast a few miles south of the capital.

This innovative project, agreed with the generator HS Orka, will be sited next to a geothermal power plant at Reykjanes which will provide the electricity.

It will eventually produce 40,000 tonnes of salmon, which is 6,000 tonnes more than the entire country harvested in 2020. Other companies are lining up with their own plans.

There are predictions that Iceland’s salmon output could overtake Scotland’s current production total of 204,000 tonnes by 2030.

At the moment the focus on this rugged island of 360,000 people – often called the land of ice and fire – has been about the spectacular eruption from the Fagradalsfjall Volcano, not too far from the planned Samherji project site.

But in business circles the talk is about fish farming, how far it can go and its impact on the national economy.

Development is still at the jigsaw stage with various pieces coming together, and the full picture is far from complete.

The two main fish farming regions are at either end of the country – the Westfjords and the Eastfjords regions, with Samherji’s project somewhat isolated near Reykjavik in the south west.

According to the Ministry of Finance and Economic Affairs the export value of fish farming is likely to double in the next two years to US$322m (£232m) a year – and to continue rising.

While trawler-caught cod remains king, farmed salmon was the second highest seafood export earner for Iceland at the start of this year.

According to official figures the country saw salmon production in 2020 rise by over 20% to 34,200 tonnes, which does not seem a lot when compared to Norway, Scotland or the Faroe Islands. But it is only a decade ago that Iceland’s salmon harvest barely totalled 1,000 tonnes.

It is no surprise that much of the serious investment is coming from Norway. SalMar owns a majority stake in Icelandic Salmon AS (Arnarlax), while Norway Royal Salmon (now part of the NTS group) has taken control of Arctic Fish. Both companies are planning further significant investment.

Not everyone in the government is happy that such an important industry is largely foreign owned. But traditional Icelandic fishing companies and private local investors are now showing increased interest.

Last year Iceland’s Fisheries Minister Kristján Þór Júlíusson, confirmed a “risk assessment” figure of 106,500 tonnes of salmon farming in the sea.

That total was increased from a previous assessment volume of 71,000 tonnes, and there may be further room for manoeuvre.

Þorsteinn Már Baldvinsson, CEO of Samherji said in an interview with the newspaper Frettabladid earlier this year that, within four or five years, three of the largest seafood companies in turnover terms will be salmon farmers. Most of these, he added, will be Norwegian owned.

He said: “Norway produces about 1.3 million tonnes (of salmon) and is expected to reach 2.5 million tonnes in a decade. The value of Norwegian salmon farming is now at least 20 times greater than of all cod caught off the coast of Iceland.”

He was speaking before his company unveiled the Reykjanes power plant project and Iceland ordered a 13% reduction in its cod quota due to concerns over stocks

The advantage salmon has over wild caught species, he argues, is the ability to deliver on time and a guarantee of quality. Unlike trawlers, salmon farms do not have to face the rigours of weather or the uncertainty of finding fish.

Iceland also has a number of important advantages over its rivals, like Norway. Its farms are less likely to be plagued by biological problems such as lice or infectious salmon anaemia (ISA). Very few farmed fish escaped into the country’s rivers last year.

Iceland is geographically isolated, however, which means exporting fish by air is usually more expensive.

Despite this, it has been forging important trade links with key markets in the United States and the Far East.

The Icelandic government’s attitude towards fish farming has, according some critics, been lukewarm in the past.

Companies regularly complain about the number of regulations and the time it takes to get a decision. The level of taxation is another issue that worries participating companies.

But attitudes are changing and the launch of Iceland’s new aquaculture dashboard opening the sector to the country at large in April was a sign of that.

The country also boasts some of the finest wild salmon fishing in the northern hemisphere and local sports groups, often with large foreign memberships, have consistently opposed aquaculture expansion plans. Some would like to see the industry removed from the country altogether.

But this view is not held by most of those who live in the Westfjords (64,500 tonnes permitted) and Eastfjords (42,000 tonnes permitted) where the most of the growth is taking place.

These were once regions with strong fishing economies that have declined over the years.

Today, these communities are being transformed thanks to new jobs and investment from fish farming companies. And it is just the beginning.

Arnarlax was recently granted permission to build housing accommodation for staff working on the company new projects.

It is estimated that within a year or two, more than 1,800 people in the Westfjords will owe their income to aquaculture in one form or another.

To a country like the UK that might not seem a large figure but in a region where urban populations are measured in the low thousands it represents a substantial proportion of the workforce.

The good news is that aquaculture is attracting some of Iceland’s youngest and brightest. A few weeks ago ten students from the fishery technology college in Grindavik graduated from their fish farming course.

Teachers at the college say demand for aquaculture courses are growing because the industry offers good employment prospects and attractive salaries.

There are some who believe the country could and should have moved faster if it doesn’t want to live in the shadow of its larger rivals.

Iceland may not be in the fish farming premier league quite yet, but promotion beckons.

How Samherji’s new plant will look

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