Could California Have a Future with Kelp Aquaculture?

This StoryMap serves as an accessible summary on the state of kelp farming in California, why it matters, and what can be done to help the industry gain traction. This StoryMap was created as part of a capstone project for the Masters of Advanced Studies Climate Science and Policy program at Scripps Institution of Oceanography. You can find the full length report  here .

At first glance, kelp aquaculture may seem like it has nothing to do with climate change, environmental protection, or resiliency. But cultivating kelp in the ocean has the potential to be an important tool for all those issues and more. Kelp is becoming increasingly recognized by companies, investors, researchers, and organizations for its environmental, social, and economic value.

So, what is kelp aquaculture?

As defined by NOAA, it’s the “the breeding, rearing, and harvesting of fish, shellfish, algae, and other organisms in all types of water environments”.

Kelp is a term for brown seaweed, which is a type of macroalgae.

Kelp aquaculture isn’t new. The use of seaweed in foods and pharmaceuticals can be traced back as far as 1700 years ago in China (Yang et al., 2017). Today it has evolved into a refined process that resulted in 35.8 million tons of seaweed production in 2019 (Cai, 2021) from countries all over the world.

It’s a fairly low-tech process involving a system of buoys and long lines suspended in the water. Kelp seedlings are produced in a hatchery and then attached to long lines for growout to harvest size, growing extremely quick, up to 18 inches per day under ideal conditions (NOAA, 2021).

The global market for seaweed, the overarching category that kelp falls within, was worth $15 billion in 2021 and is projected to reach $24.92 billion by 2028 (Fortune Business Insights, 2021). 

Seaweed is primarily grown in Asia, with 97% being produced by China, Indonesia, the Philippines, Korea, and Japan (Kim et al., 2019). 

Other regions are beginning to grow their own kelp industries, such as Europe, South America and the U.S.

Kelp is versatile and can be used in a wide range of products, from food to cosmetics to animal feed and more.

Growing kelp also comes with a multitude of benefits for the environment, local communities, and the economy. 

Despite this list of benefits there are some critiques and worries when it comes to expanding kelp farming. 

A few ecological concerns include potential for marine mammal entanglement in the lines and buoys, shading of the seafloor by the kelp farm which can impact the benthos (organisms on the seafloor), encroachment on commercial fishing areas, and use of non-native species which could unintentionally spread from the cultivation site and impact local ecosystems (Grebe et al., 2019). Many of these concerns could be mitigated with proper spatial planning and implementation of environmental regulations. 

Economically, concerns primarily have to do with the relatively high cost of kelp farming in the U.S. compared to Asia, leading to an inability to compete with overseas prices. This could be addressed by accessing different markets in the U.S. and focusing on higher value specialty products, as well as financially compensating farmers for the ecosystem services that kelp provides. 

Despite demand for kelp growing every year, and a laundry list of potential benefits from farming kelp, California currently has no ocean-based kelp aquaculture facilities selling commercially on the market. This is a missed opportunity. 

Demand for kelp-based snacks alone is estimated at $250 million in the U.S. (Mazza, 2017). The popularity of kelp has been growing due to several factors, including greater adoption of kelp in diets outside of Asia, diversification of uses of kelp, consumer preferences moving towards sustainable options, and interest in the environmental benefits of kelp aquaculture. 

Kelp aquaculture is already expanding in other parts of the U.S. Maine, for example, has over 200 sites permitted to grow and had a harvest in 2019 of 325,000 pounds (STATE of the STATES). Alaska has 22 permitted sites with many more proposed. The state harvested 250,000 pounds in 2019 (STATE of the STATES) and is also expecting continued growth. 

So, why isn’t California getting on board and joining the so called “seaweed revolution”? There are quite a few roadblocks the state faces.

1. Difficult permitting process
   1. The process of obtaining a permit for kelp aquaculture involves many agencies, is multi-phased, expensive, and time consuming. There is no kelp-specific permit, therefore prospective farmers must navigate a system that was originally designed for commercial shellfish operations (GreenWave). The timeline of obtaining the necessary permits from the multiple agencies involved can take several years in many cases, which delays profits and presents a significant barrier to small scale operations who may lack the resources necessary to complete the process
2. Marine spatial planning
   1. The waters within state jurisdiction, everything within 3 miles from the coast, have competing interests such as recreational use, shipping lanes, marine protected areas, commercial fishing zones, oil drilling, and more. Prospective kelp farmers must navigate all those factors, in addition to considering adequate oceanic conditions conducive to kelp growth. To avoid conflicts of use and ensure environmental preservation, comprehensive marine spatial planning is needed to open the door for the industry.
3. Cost-competitiveness
   1. Because the farms and markets for kelp are so established in Asia already and environmental regulations are less stringent, the production costs are typically significantly lower than what is possible for California. The current import price for seaweed from Asia is $3.45 per kilo, and current export prices for seaweed from the U.S. is 10.55$ per kilo (US Seaweed Prices). It is unlikely that California will ever be able to achieve similar cost competitiveness on a global scale, which means that farmers will have to tap into different kinds of higher-end markets than what Asia is currently serving.
4. Growing demand and diversifying products
   1. If the production can scale up, demand must also to ensure the farmers can make a profit. The use of kelp needs to expand to value-add and higher priced specialty products beyond the current uses. Many companies are working on creating exactly those types of products, such as chips, beer, sauces, skincare and more. For the industry to thrive, kelp needs to become a more frequent part of the U.S. diet.  
5. Processing facilities
   1. Since California has yet to start commercially growing kelp, large scale processing capacity does not exist. Unless the harvested kelp is sold to local markets, it will need to be quickly processed to preserve it. Processing hubs need to be established near areas of kelp aquaculture to limit time between harvest and processing.
6. Social license to operate
   1. The social license to operate refers to the informal approval for a project by the local community and other stakeholders. Ensuring that public perceptions of kelp aquaculture are shaped by accurate information and avoiding misconceptions will be key to gaining the social license to operate in a state that takes its coastal protection measures very seriously.

There are a few policies already in place that impact kelp aquaculture in the US

1.     The Farm Bill federal legislation which covers policy related to agriculture in the U.S. and is renewed and revised every five years. The 2018 version dramatically expanded support for algae agriculture and technology (Agriculture Improvement Act of 2018). A key part of that support is the expansion of crop insurance to algae, which is now considered an agricultural commodity. This opens the doors for kelp aquaculture to be federally protected, allowing farmers to mitigate financial risk if their harvest is lost due to factors beyond their control. This may encourage participation in the industry if prospective farmers know they have a certain degree of protection from these risk factors.  

2. Executive Order 13921, Promoting American Seafood Competitiveness and Economic Growth, states that measures should be taken to ensure food security, remove unnecessary regulatory burdens on aquaculture, and provide environmentally safe and sustainable seafood, all of which apply to the kelp aquaculture industry (Executive Order 13921).

3.     Executive Order 13921 directly led to the creation of Nationwide Permit 55 from the Army Corp of Engineers. Nationwide Permits (NWPs) are, “designed to streamline authorization of projects that produce minimal impact on the nation’s aquatic environment” (Section 404 CWA Permit, 2020). NWP 55 extended this streamlined permit to seaweed mariculture activities, creating opportunity for kelp aquaculture in federal waters. Currently though, all proposed farms have been within 3 miles from the coastline, which is under state jurisdiction and therefore NWP 55 would not be used in those cases.

Kelp aquaculture has yet to be commercially permitted within state waters and as such there is not existing examples to reference nor specific pathways accounting for the differences associated with the practice. Establishing a specific permit pathway that is tailored to kelp that creates a more transparent and certain permitting process for applicants would simplify obtaining a permit. The Fish and Game Commission, the lead agency involved in state aquaculture permitting, could work to establish this specialized permit and remove the current bottleneck that exists. 

To avoid conflicts with other uses of state waters, such as shipping lanes, commercial fishing areas, and military waters, there needs to be special care taken to properly site areas for kelp aquaculture use. NOAA is the agency tasked with siting federal Aquaculture Opportunity Areas (AOAs), which are environmentally, socially, and economically appropriate for commercial aquaculture (NOAA). For the California kelp industry to have the extensive spatial planning necessary for proper site selection, NOAA should be recruited as the lead agency. They would be well positioned to perform similar spatial analyses within state waters that would be best suited for kelp aquaculture. 

To gain the social license to operate and encourage public support around new kelp aquaculture projects, more education is needed to better inform people and decision makers. Creating a public campaign around the environmental benefits of kelp aquaculture and the relatively small risks associated with it would be beneficial to garnering public support for kelp aquaculture. This could be in the form of pamphlets, short videos, infographics, website resources, etc. that can alleviate concerns that usually arise around aquaculture projects.

The market for kelp locally needs to grow and diversify, taking the form of new specialty products that can be marketed for their sustainability and climate friendly nature. The nascent U.S. kelp industry would gain significantly if they collectively worked on diversifying products and growing the domestic market, expanding demand from coast to coast while concurrently working to expand production. Creating a public campaign to promote kelp products and expose people who aren’t familiar with the food is an important step to ensuring long term demand. 

Starting an offshore kelp farm in the U.S. is more expensive than in other regions of the world with more established industries, and therefore issues of cost-competitiveness arise. One way to encourage the expansion of the industry and lower the barrier to entry is to offer a subsidy to kelp aquaculture operations. A subsidy could compensate kelp farmers for the positive externalities their kelp provides. With proper cost-benefit analysis, the subsidy price should accurately reflect the value of the ecosystem services provided by the kelp grown. 

Kelp aquaculture still needs robust research to continue to quantify the ecosystem benefits as well as any potential negative impacts on the environment. There also needs to be more analysis done on the economic and business side of kelp, which would help inform investors and create more clarity for those wanting to start kelp farms in California. A policy of continual support for this area of research could include funding from both state, federal, and private sources. A multitude of benefits can come from this, as research done in California can inform other states and regions, and ultimately help bolster the nascent industry nationally. 

The kelp aquaculture industry in California is complex and faces many barriers, some of which are shared by other states and some of which are unique to California. Progress to address these obstacles has been minimal, and as a result California lags behind other regions in the U.S. in establishing a successful kelp industry. The demand for kelp continues to grow both worldwide and domestically, yet California has so far failed to contribute any production to meet this demand.

Action is needed from both state and private entities to bring together the resources necessary to overcome the various roadblocks. A combination of cooperation within the industry to work collectively on market development and processing infrastructure along with funding from the state for a kelp subsidy, further research, and an improved permitting system would vastly improve the chances of industry success in the state. 

Despite the kelp industry being slow to grow in California, there is hope on the horizon. Pilot projects in the San Diego Bay (Sunken Seaweeds) and Humboldt Bay (HSU) are promising signs of progress, and with the right incentives and tools there is possibility for significant growth. California is so often a leader nationally in the environmental and climate change realm, and the kelp aquaculture industry presents an opportunity to take the lead once again and pave the way for others to follow. 

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