Law firm disappointed with Norway's environmental flexibility scheme

Lawyers from a firm that has often represented salmon farmers in Norway have delivered a largely negative assessment of a government proposal intended to encourage farming methods that have reduced environmental impact.

Last week, the government submitted a proposal for consultation on the use of reduced production capacity under Norway’s “traffic light system” under special environmental conditions.

The biennial traffic light ratings define each of the country’s 13 salmonid production areas as red, yellow, or green, depending on the impact that sea lice from fish farms are calculated to have on migrating wild salmon smolts. Fish farmers in a red rated area must reduced production by 6%, a penalty that has occurred three times in a row in some areas, meaning a reduction of around 18%.

Zero emissions

The government’s proposal means that fish farmers in certain production areas can get back reduced production capacity provided that the operation is carried out using “zero emission” technology, protection against escape and collection of sludge. The consultation deadline is March 20, 2025.

The proposal had to be delivered before the end of the year to comply with a request from Norway’s parliament, the Storting, for an environmental flexibility scheme for salmon farming. But Mons Alfred Paulsen, Trond Hatland and Daniel-André Hansen of the Thommessen law firm, write in an article that, in summary, large parts of the Storting’s remain unanswered.

The lawyers say:

• The proposal does not address environmental flexibility for existing permit capacity, as only production capacity downgraded under the traffic light system is covered. This [flexibility for existing permit capacity] is intended to be addressed in a new aquaculture report. We see no reason why the same principles proposed for downgraded capacity should not apply to increased capacity. Especially in light of the fact that the Ministry believes that the proposal, in isolation, neither contributes to an improvement nor a deterioration of the environmental state. Logic dictates that the same will also apply to increased capacity.
• Although the scheme proposed on paper is technology neutral, in practice there are very few tools in the toolbox.
• The Storting’s request resolution required that low-emission technology be included, but this is not being addressed.
• Production areas that have not had their production capacity reduced through the traffic light system are not included.
• It will be possible to use a combination of regular capacity and downgraded capacity in production units that meet the conditions, which is positive.
• All players are automatically given the opportunity to use any reduced capacity, without application, which is also positive.
• It is proposed that the Directorate of Fisheries be given a blank mandate to decide that certain types of production units cannot be used for downsized capacity. Given the case processing time and the access to expertise in the directorate on this type of technology, there is no reason to expect a quick case processing time or a high degree of predictability.
• The government requests the consultation body’s assessment of the requirement for "exchange" of permit capacity in order to use downgraded capacity. This means in practice that actors must "pay" to avoid downgrades if the capacity is to be used in zero-emission solutions. This should be addressed in the consultation response.
• The proposal involves great uncertainty and high costs, both in the investment and operational phases. It is unclear to what extent the proposed incentives are strong enough to justify such investments.
• Several of the requirements in the draft amendment to the Production Area Regulations are very generic. This should be addressed in the consultation response.
• We also question the requirement that "sludge and feed residues be collected" in this proposal. Collection is not a relevant consideration in the current traffic light system and should therefore not be a criterion for using reduced capacity in line with the proposal. This may of course be different if capacity on existing permits is increased, as the Aquaculture Committee suggested.
• Otherwise, the consultation proposal will increase the burden on an already heavily burdened administration, especially the Directorate of Fisheries and the Norwegian Food Safety Authority.
• The government's proposal is not a Christmas present for the industry, but an inadequate response to the Storting's clear request, and to the aquaculture industry's call – over several years – for tools for further investment in more sustainable solutions.

Limited scope

The lawyers’ assessment follows more immediate responses from others in the sector after the proposal was published last Friday,

Robert Eriksson, chief executive of seafood trade body Seafood Companies, was among those disappointed with the limited scope of the proposal, and the lack of incentive for net pen farmers to switch to zero-emission technology.

“We would have liked to have seen the scheme designed so that it could be used throughout the country,” he told Fish Farming Expert’s Norwegian sister site, Kyst.no. “But the fact that it is now starting where the challenges are greatest is something we can sympathise with. At the same time, the Seafood Companies must acknowledge their disappointment that the government has not followed up on our proposal for a conversion scheme.”

Weak incentives

Eriksson says that he has noticed that fisheries minister Marianne Sivertsen Næss says that this is a clear commitment to closed technology. 

“Seafood Companies is disappointed that strong enough incentives are not being provided to actually call this a clear commitment. We have noted that the ministry itself writes in the consultation note that ‘It is unclear to what extent the incentives proposed are strong enough to justify such investments’,” he says, adding: “The ministry further writes that ‘In isolation, the proposal contributes neither to an improvement nor a deterioration of the environmental situation’. 

“In our opinion, this is a clear admission that they are not fully delivering on the request from the Storting. There is a clear demand from the Storting that the scheme must contribute to reducing the industry's environmental footprint. Based on the statements that have also come from Storting politicians, it emphasises that today's proposal does not meet the order well enough.”