Financial feasibility of seaweed farming in Norway

Abstract

Seaweed farming is considered to have a high potential in Norway, but some uncertainties about its profitability remain. This thesis investigates the economic feasibility of small-scale seaweed farming in Norway through economic modelling and sensitivity analysis. In total, 768 farming scenarios are constructed in this study to test the profitability of different techniques and methods for seaweed cultivation in a 9 hectares coastal area. The model identifies a number of opportunities to improve profitability and shows that under certain conditions, seaweed farming can be profitable in Norway. Those conditions include using horizontal growlines with a narrow spacing of 4m and the method of partial harvesting. Under those conditions, the seaweed farm model yields a net present value of NOK 1 513 561 after 10 years, considering a discount rate of 10%. Those relatively low profits imply that the risk associated with the project is relatively high, with a -19% decrease of either the yield or the market price of seaweed bringing the net present value to 0. The industry and its stakeholders must therefore continue their efforts to increase profitability of small-scale seaweed farming in order to significantly develop it in Norway.