Demand for seafood is growing in the world. Is there a future in Ukrainian aquaculture?

How is the world and Europe synchronizing business growth with the requirements of EPC and other “green” strategies? What problems do domestic representatives of the aquaculture business face? How can the government help Ukrainian manufacturers to overcome the lag behind other manufacturers in the world?

International demand for seafood is growing, and aquaculture plays a key role in meeting it. A few figures to confirm: in 2022, the volume of the world market of the industry was 75.6 million tons, by 2028, according to international experts, it will reach 100.3 million tons. Unfortunately, the Ukrainian market currently lags behind the world market in terms of technological level and growth rate: in 2020, we produced only 0.02% of aquaculture products in the world.

At the same time, the potential of Ukrainian aquaculture is huge, and its development should become one of today’s priority tasks. Mariculture of Ukraine may become a trend of the future, because the natural and climatic conditions of our region ideally contribute to its development.

How is the world and Europe synchronizing business growth with the requirements of EPC and other “green” strategies? What problems do domestic representatives of the aquaculture business face? How can the government help Ukrainian manufacturers to overcome the lag behind other manufacturers in the world?

The world aquaculture market will grow. How not to harm the planet?

According to the estimate of the Fisheries Committee of the Food and Agriculture Organization of the United Nations (FAO), the average annual consumption of aquatic biological resources and products produced from them in the world in 2018-2020 was 20.5 kilograms per capita, of which almost 52% are aquaculture products. According to forecasts, in 2030 this figure should be 21.2 kilograms.

Today, global aquaculture is technologically driven, becoming more competitive and adaptive, attracting investment and fostering innovation. Growing demand for seafood is driving the market to develop. Aquaculture’s ability to grow a variety of aquatic species in a controlled environment is perfectly aligned with the need for a stable and reliable supply of seafood. This factor provides a significant contribution to global food security and economic growth of successful market players.

In addition to meeting food needs, aquaculture plays a role in restoring the health and sustainability of the marine ecosystem, does not harm it compared to industrial fishing, so it is definitely an important tool of blue transformation. The blue transformation is a set of policies that will allow the world to achieve the goals of a sustainable blue economy. A sustainable blue economy, in turn, is an important component of the global green course in general and the European Green Course (EGC) in particular, necessary to achieve the environmental and climate goals of all humanity. It includes a number of economic directions and corresponding policies, which together determine whether the use of ocean resources meets the requirements of modernity.

Finding a compromise between meeting the needs of water users for aquaculture purposes in marine, brackish and freshwater reservoirs, the efficiency and economy of water use, and ensuring food security are key issues in promoting the sustainable development of the blue economy and aquaculture.

How does the European Green Deal regulate the development of the aquaculture market?

Special attention is paid to aquaculture within the framework of the development of a sustainable blue economy in the EU.

Currently, aquaculture production accounts for only 25% of EU seafood consumption, and EU aquaculture accounts for less than 2% of its global production. However, Europe is determined to change this: the development of a sustainable blue economy is one of the directions of the Green Deal, which today provides 4.5 million jobs in Europe. This direction covers all industries and sectors related to oceans, seas and coasts: shipping, fishing, energy production, ports, shipyards, land-based aquaculture and seaweed production, coastal tourism.

Today, the European Maritime, Fisheries and Aquaculture Fund (EMFAF) is the main source of funding for innovation, expanding the range of entities that become part of the blue economy. This fund was established in 2021 and will run until 2027. Its work is aimed at supporting the EU’s Common Fisheries Policy (CFP), the EU’s maritime policy and the EU’s international ocean governance agenda.

The fund’s activities also contribute to the achievement of the UN’s sustainable development goal – “preservation and rational use of oceans, seas and marine resources”, which the EU is committed to fulfilling.

How does EMFAF support aquaculture actors? First of all, additional financing. Entrepreneurs receive money according to the following algorithm:

  1. A business entity creates an application for additional financing of its project (according to the form established by the state) – “investment project”.
  2. The project is submitted to the territorial body or the central executive body responsible for the implementation of the policy in the field of aquaculture. The state determines the size of the funding fund for a certain year.
  3. Points are assigned to each investment project based on the following criteria: availability of permits (including building permits, OVD), processability of processes, size of required investments, efficiency of water resources use.
  4. A list of projects is being formed.
  5. Order of satisfaction of projects: from those with the highest number of points to those with the lowest number of points.
  6. The activity of the business entity must correspond to the investment project during the period of its implementation and the following 5 years from the moment of its end.

The procedure may differ slightly in different EU countries, but the general principle of receiving aid is exactly the same. By allocating aid to support aquaculture, the EU hopes for rapid adaptation of aquaculture to modern requirements, the use of cleaner energy sources, reduction of the negative impact of human activity on the seas and oceans, and an increase in the number of developed innovative projects that ensure the sustainable use of water and marine resources.

How can Ukraine become a full-fledged player in the global aquaculture market?

In the conditions of war, the primary task of Ukraine is to ensure the food security of the population, increase the production of basic food products, etc. However, at the same time, it is necessary to invest resources in the future, in particular, in promoting the development of promising sectors of the economy. In the field of aquaculture, the state should focus on ensuring a harmonious combination of supporting the country’s food security and rational, tireless use of aquatic biological resources.

BRDO is working to improve the regulatory framework in the field of aquaculture. In September, a survey of market entities was conducted, which showed that:

  • 70% of respondents have problems related to leases, they need to settle the issue of leasing hydrotechnical structures, land and reservoirs;
  • 90% want proper state support for aquaculture;
  • 80% consider it necessary to adopt investment legislation in the fishing industry of Ukraine;
  • 80% support the need to introduce a traceability mechanism in the field of aquaculture;
  • 95% do not know about the provisions of the European Green Agreement and/or do not work on implementing its provisions in their own production.

These figures clearly demonstrate the need for effective cooperation between the business of the aquaculture industry and the Ukrainian government. The years 2022-2023, despite the extremely difficult conditions caused by military actions, nevertheless became very productive in terms of legislative changes for the Ukrainian fishing industry in general and aquaculture in particular. In fact, a comprehensive reform of the fishing industry was started, the implementation of which continues today.

Today, the main challenges for Ukrainian aquaculture are:

  • the need to introduce a transparent and simple regulation that will allow to develop not only aquaculture in fresh water bodies, but also marine aquaculture.
  • the need to settle the issue of lease and land relations between business entities, local self-government bodies and authorities, which is quite acute for most market participants.
  • fulfillment of EU requirements for ensuring the traceability of aquaculture products (Council Regulation (EC) No. 1224/2009, Article 58: “Traceability. All batches of fishery and aquaculture products must be traceable at all stages of production, processing and distribution, from catching or harvesting to the stage. Fishery and aquaculture products must be properly labeled to ensure traceability of each lot.”).
  • 100% reporting of aquaculture entities, and, as a result, the collection and disclosure by the state of real market statistics.

Lack of sufficient investment is another pressing problem of the industry. Their attraction requires more than attractive sales prospects. Investors, external and internal, demand proper working conditions. And the state must guarantee them. Ukrainian aquaculture needs modern legislation and appropriate regulatory standards, as well as state support. The above-mentioned example of EU aquaculture policy can serve as a benchmark. Implementation of these plans is possible only under the condition of legislative reforms of the industry.

Legislative initiatives to change the aquaculture market in Ukraine: what has already been done?

First of all, we are talking about draft law No. 8119, which is aimed at ensuring the openness, publicity and transparency of the procedure for attracting investments in the development of the fishing industry. The creation of new investment legislation will simplify the rental process in the market, introduce mechanisms of equal access to the resource, and at the same time attract additional funds to the market.

The document offers a competitive basis for attracting investments based on investment projects, open auctions and the possibility of obtaining maximum benefits for both the state and business entities.

We also have registered draft law No. 9545. The document proposes to introduce an electronic system of traceability of the origin of fishery and aquaculture products, which will mean the ability to identify any market entity and any regulatory object, record all transactions. The electronic system will cover the process of batch formation and labeling, first sale, transport sales and the possibility of traceability to the final consumer of aquaculture facilities.

Also, the draft law provides for the determination of the main legal, economic and organizational principles for ensuring the traceability of fishery and aquaculture products; introduction into the national legislation of Ukraine of certificates: the origin of aquatic biological resources (Certificate of Origin), catching of aquatic biological resources (Catch Certificate), re-export of aquatic biological resources (Re-export Certificate); introduction of certificates on the processing of traceable aquatic biological resources and/or products from them, which are mandatory for customs clearance of traceable aquatic biological resources and/or products from them during export-import operations and re-export.

In addition, the Code of Ukraine on Administrative Offenses was supplemented with an article on establishing responsibility in the field of traceability of aquatic biological resources and/or their products (ZP No. 9546).

Ukraine is working to create conditions for the development of aquaculture, which is a strategic goal of the state, enshrined in the Strategy for the Development of the Fisheries Industry of Ukraine for the period until 2030. Therefore, in order to achieve the most effective result, we must focus on the implementation of tasks for the implementation of this strategic goal, continue work on the legislative settlement of problematic issues in the sector and the creation of normative and legal regulation that will comply with EU legislation, the principles of the EU Common Fisheries Policy and the EWC.

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