EUROPEAN COMMISSION Brussels, 15.11.2022 COM(2022) 592 final COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS Towards a Strong and Sustainable EU Algae Sector {SWD(2022) 361 final}



1.Introduction Now is the time to fully harness the potential of algae as a renewable resource in Europe. The need to ensure the security of supply of raw materials and energy has become all the more pressing with the unjustified and unprovoked Russian military aggression against Ukraine, which affects the availability of fertilisers, animal feed ingredients and energy. This is ‘fuelling high global energy, commodity and food prices and increasing uncertainty, factors that are dampening growth and exacerbating inflationary pressures globally’. A growing global population, the depletion of resources, environmental pressures, and climate change require a different approach to be taken to food and economic systems. For this to happen, it is essential to develop new and sustainable ways of feeding a rapidly growing global population. How? By, for one, making use of the vast and too little used resource that is the seas and the ocean – currently the source of only up to 2% of human food, despite covering over 70% of the Earth’s surface. The European Green Deal, the Farm to Fork Strategy and the Sustainable Blue Economy Communication identify the potential of farmed seafood as a source of protein for food and feed with a low-carbon footprint. The Farm to Fork Strategy highlights the role of algae as an important source of alternative protein for a sustainable food system and global food security. Strategic guidelines for a more sustainable and competitive EU aquaculture for the period 2021 to 2030 (Strategic guidelines for EU aquaculture) stress the need to promote the farming of algae – both macroalgae (seaweed) and microalgae – as a way of contributing to achieving several objectives of the European Green Deal. The farming of algae can contribute to achieving the EU’s objectives in terms of decarbonisation, zero pollution, circularity, the preservation and restoration of biodiversity, the protection of ecosystems and the development of environmental services. Algae can replace fossil-based products, and serve as raw material for plant biostimulants, bio-based chemicals and other materials, and biofuels. The Sustainable Carbon Cycles Communication recognises the potential of algae for the blue carbon economy. The ‘Food from the Oceans’ report prepared by the European Commission’s (the Commission) High-Level Scientific Advice Mechanism identifies seaweed as having the potential to satisfy the projected more than 100 million tonnes of additional biomass demand for human food in the next 20 years. The production and processing of algae and other new marine resources (biomass) can help to provide sustainable food and feed products as well as pharmaceuticals, nutraceuticals, plant biostimulants, bio-based packaging, cosmetics and other non-food products (see Figure 1). Figure 1: Algae biomass applications But expansion of seaweed cultivation at sea should not affect the equilibrium of marine ecosystems and should avoid reproducing in oceans the same environmental mistakes historically done on land. Although currently small, the European algae sector has the potential to become a significant part of the EU blue bioeconomy. A combination of research and innovation in the EU and enthusiastic entrepreneurship has created the momentum the EU algae sector needed to develop and expand – the UN Global Compact even call it a Seaweed Revolution – while contributing to the achievement of the European Green Deal objectives. This puts Europe in a very good position to harness its algae potential over the next decade. The Seaweed for Europe coalition estimates that European demand for seaweed could increase from around 270 000 tonnes in 2019 to 8 million tonnes in 2030 and reach EUR 9 billion in value in 2030 across all sectors, with feed, food and plant biostimulants (fertilising products) being the largest. Such an increase in production could create around 85 000 jobs, remove thousands of tonnes of phosphorus and nitrogen from the European Seas annually, mitigate up to 5.4 million tonnes of CO2 emissions a year and relieve pressure on the land16. A thriving EU algae industry could become a flagship and source of inspiration for other industries to become more regenerative, innovative and socially exemplary, creating thousands of jobs in the process, especially in coastal communities. As announced in the Communication on the Commission’s new approach for a sustainable blue economy5, this Communication looks at the potential of algae in the EU and sets out a coherent approach, including targeted actions, to support the upscaling of regenerative algae cultivation and production throughout the EU, and to develop and mainstream the markets for food and non-food algae applications. 2.Why algae are considered an untapped resource in Europe Low in fat and rich in dietary fibres, micronutrients and bioactive compounds, algae are often presented as a healthy and low-calorie food, with some species known for having a particularly high protein content. Their biochemical compounds and properties make algae a valuable material for a growing number of other commercial applications, e.g. animal/fish feed and feed additives; pharmaceuticals; nutraceuticals; plant biostimulants; bio-based packaging; cosmetics or biofuels and services provider for wastewater treatment; for example, carbon and nutrients fixation etc. Algae also remove nutrients from aquatic ecosystems, thereby reducing eutrophication. Seaweed, when being cultivated at sea, removes carbon, thereby reducing ocean acidification. All these potential benefits will of course have to be considered in light of the existing EU legislation, and balanced with the potential health risks, when relevant (e.g. considering the high content of heavy metals in certain algae species). The seaweed industry in Europe, currently focused more on the harvesting of seaweed from the wild rather than cultivation in aquaculture facilities as in Asia, is still very much at an embryonic stage. While the Asian market,14 has grown significantly over the past decade (where seaweed accounts for around a half of global aquaculture production), European seaweed production is so far negligible (see Figure 2 below). Figure 2: Marine aquaculture production in the EU and globally . Despite its current marginal share in the global seaweed market , given the favourable business prospects, Europe can develop a strong algae industry centred on aquaculture production and innovative seaweed mariculture (marine permaculture ). Such an industry may harness the potential of vast European seas while creating jobs for local communities, producing healthy low-carbon products, regenerating coastal ecosystems (e.g. fixing CO2 and nutrients and generating oxygen) and providing ecosystem services. The EU is a top global importer of seaweed products in terms of value (EUR 554 million in 2016), so there is clearly a strong demand for seaweed products in Europe. This demand is set to increase in line with health and sustainability trends. A growing human population worldwide and consumption patterns will further boost demand for algae and algae-based products . EU demand for algae and algae-based products is equally expected to increase in the years to come (see Figure 3). With regard to microalgae, which can also be produced on land and far from the sea, market demand for chlorella and the cyanobacteria spirulina is also growing in the EU.

Figure 3: Expected increase in demand for algae-based products16,. It is expected that the European market will grow at an annual growth rate for chlorella and spirulina of 6.4% and 8.7% respectively by 202530. The demand for food and drink products containing seaweed in Europe increased by a factor of 2.5 between 2011 and 2015. The EU’s growing vegetarian and vegan population, currently estimated at around 75 million, and increasingly environmental and health-conscious consumers will also increase the demand for plant-based food and non-food products, including algae. All EU maritime regions have also been recognised as fertile ground and areas where considerable environmental and socioeconomic benefits could be derived from the development of the algae industry. For example, the Atlantic Ocean and the North Sea provide ideal natural conditions for seaweed cultivation due to their cold, nutrient-rich waters, and researchers believe that Europe has vast areas suitable for seaweed cultivation. 3.What has been done so far and why is it not enough? The Roadmap for the Blue Bioeconomy published by the Blue Bioeconomy Forum at the end of 2019, after consulting around 300 relevant stakeholders, identified bottlenecks and made recommendations in four main areas: (1) policy, environment and regulations; (2) finance and business development; (3) consumers and value chains and (4) science, technology and innovation. On the current EU algae sector and the potential for its sustainable growth, it concluded that the development of algae cultivation has been hindered by factors such as high production costs, low-scale production, limited knowledge of the markets, consumers’ needs and the risks and environmental impacts of algae cultivation, as well as a fragmented governance framework. Figure 4 below summarises the biggest problems and identifies general and specific ways of addressing these problems. In recent years, the Commission has initiated and supported a number of algae-related initiatives currently in an implementation or planning phase (2021-2023). These include the EU4Algae project (creation of a collaborative European Algae Stakeholder Platform), EU research and innovation funds’ calls for applications (Horizon 2020, Horizon Europe), the Bio-Based Europe Joint Undertaking, investments in the algae sector made possible by the European Maritime and Fisheries Fund and the European Regional Development Fund, blue economy-related business support mechanisms (Blue Invest, the Aquaculture Assistance Mechanism ). Figure 4: Problems, objectives and proposed action areas for EU algae-related initiatives. There are also initiatives in place to help increase knowledge of algae, such as the European Marine Data and Observation Network (mapping algae companies), the Commission’s Knowledge Centre for the Bioeconomy, the Joint Research Centre’s (JRC) Biomass study, algae-related studies looking at how algae could help to achieve climate-related goals and its relationship with nutrients, ocean literacy and awareness-raising initiatives, smart specialisation strategies, etc. The EU Mission Restore our Ocean and Waters by 2030 Board states in its recent report that regenerating the ocean and waters is vital for human existence, wellbeing and the livelihoods of EU citizens. The Food 2030 initiative being deployed via Horizon Europe has convened and fostered a systems approach to R&I policy that connects land and sea, producers to consumers, from ‘farm to fork to gut and back’. It is calling for a transformation of the food systems to respect planetary boundaries, provide healthy safe and nutritious food and diets for all, and sustain a diverse fair and inclusive thriving food economy. One of the ten Food 2030 pathways for action is aimed at developing solutions for food from the ocean and freshwater resources, where the role of algae farming is central. The European Blue Forum of sea users will further enable discussions between blue economy sectors (e.g. the algae sector as a major part of the EU’s blue bioeconomy), stakeholders and scientists to develop synergies and reconcile competing uses of the sea in the interests of climate neutrality, zero pollution and the protection and conservation of the marine environment. Currently, algae, specifically seaweed aquaculture, are subject to a multitude of both EU and national regulatory texts (Figure 5). Instead of the fragmentation this occasions, the algae sector could benefit from a more coherent approach. Figure 5: EU legal acts relevant to seaweed aquaculture Every action listed in Section 4 contributes individually to the development of the EU algae sector. However, a more coordinated and systemic approach is needed, supplementing the existing framework with additional policy actions, e.g. simultaneously using different levers to boost the development of a regenerative EU algae sector. The Commission has a central role to play in creating the conditions that make it possible to do something about the impediments the EU algae sector currently faces. It should also address the potential concerns of EU citizens about the environmental sustainability of large-scale seaweed cultivation and the safety of algae-based products placed on the EU market. 4.What does the EU need to do? To unlock the potential of the EU algae sector, regenerative algae cultivation and production need to be upscaled throughout the EU, and the markets for food and non-food algae applications need to be developed and mainstreamed. Once this has been done, the EU’s potential to ensure a continuous supply of algae biomass, strategic autonomy from imports and the smooth functioning of the algae sector would be unlocked. To harness the full potential of the EU algae sector, specific actions have been identified on the basis of an extensive preliminary analysis of the sector and wide-ranging stakeholder consultations. The actions identified build on existing initiatives (see Section 3 above), the best available science, knowledge and data and the best business practices. The Communication identifies 23 actions aimed at: (1)improving the governance framework and legislation,

(2)improving the business environment, (3)closing knowledge, research, technological and innovation gaps, and (4)increasing social awareness and market acceptance of algae and algae-based products in the EU. The actions outlined in this Communication are meant to be piloted in a coordinated way. They will be implemented in close collaboration with Member States and relevant stakeholders. To implement the actions envisaged in this Communication, certain funding has been earmarked and some algae-related actions in Horizon Europe have already been closed or are ongoing. The Commission will continue to look into opportunities to incorporate algae-related actions into the above and other funding calls 4.1.Improving the governance framework and legislation Currently, certain EU legislation applies to seaweed cultivation at sea or algae cultivation on land, e.g. legislation on food safety or fertilising products (Figure 5). However, there is considerable fragmentation in areas where there is no EU-level regulatory framework and different national regulations, depending on an EU Member State sector’s specific circumstances, are in place, (e.g. on licensing, access to marine space, species to be farmed). The EU algae sector therefore needs coherent and streamlined governance throughout the EU, including simplified procedures and a monitoring and quality framework, with the ultimate aim of placing on the market sustainably sourced and safe biomass algae-based products. Actions to this end could include developing a new algae farmers’ toolkit for algae cultivation in the Member States, tailored to the cultivation conditions in different sea basins, and promoting the integration of algae-related provisions into national governance frameworks (e.g. maritime spatial plans) and strategies (e.g. bioeconomy strategies). A specific action should focus on ways for algae farmers to facilitate access to marine space for algae cultivation and to facilitate the obtention of algae farming licenses (e.g. building on the guidance document for access to space envisaged in the Strategic guidelines for EU aquaculture, sharing good practices using the open method of coordination for aquaculture, etc.). The Commission will also encourage Member States to include algae cultivation in their national/regional spatial plans under the Maritime Spatial Planning Directive promoting sustainable development and encouraging the coexistence of different sectors in the marine area. Better governance also entails developing new or improved industry standards for algae products and considering making necessary legal changes. The Commission will: 1)starting in 2023 and in close collaboration with relevant stakeholders, develop a new algae farmers’ toolkit; 2)work with Member States to facilitate access to marine space, identify optimal sites for seaweed farming and include seaweed farming and sea multi-use in maritime spatial plans; 3)by the end of 2026, together with the European Committee for Standardization (CEN), develop standard testing, quantification and extraction methods for algae ingredients and contaminants; 4)by the end of 2026, together with CEN, develop algae biofuel standards and a certification methodology for algae-biofuel products to be used in various transport sectors, particularly heavy road, aviation and maritime transport; 5)starting in 2023, assess the market potential, efficiency and safety of algae-based materials when used in fertilising products and the need to amend Regulation (EU) 2019/1009 on EU fertilising products to include algae-based materials. The Commission calls on the Member States to simplify national licensing procedures and governance for algae cultivation. 4.2.Support the improvement of the business environment A smoothly functioning and thriving business landscape and healthy marine environment are crucial for the effective growth of a regenerative algae sector. The improved business environment will scale up EU industry’s collaboration within the EU and with the algae industries of countries bordering the EU in order to prepare novel food applications, where appropriate and discover species that are used as traditional food in the Member States. It should also result in new algae species being brought onto the EU market, increasing the variety in that market of algae species to be used as food or feed or for other purposes. Algae production should be promoted through different funding mechanisms as a way of diversifying economic activity and sources of income for communities in coastal and rural areas. In particular, the Commission will encourage and support the reorientation of fishers’ careers to regenerative ocean farming through pilot projects. Targeted support should be provided for innovative small and medium-sized enterprises (SMEs) making the best use of market intelligence and strengthening investors’ capacities to mobilise capital for high-potential businesses/technologies, preparing new sustainability coaching packages for SMEs, and providing technical assistance to accelerate business-to-business (B2B) cooperation. The possible use and extraction of nutrients derived from algae-based products, and the inclusion of algae-based products in green labelling and green procurement frameworks, should also be assessed. The Commission will: 6)starting in 2023 and together with the algae industry, examine the algae market and propose market-stimulating mechanisms to support and promote the transfer of technology from research to market; 7)by the end of 2024, based on the good practices, feed indicators and other relevant information develop specific guidance to promote replacing fish-based feed with algae-based feed; 8)work with the algae industry and Member States to: A.identify valid and safe alternatives to the use of nutrients and CO2 from various sources for microalgae cultivation and organic certification; B.promote the extraction of nutrients from algae biomass C.support the life cycle assessment of the environmental and climate impact of algae cultivation and production by considering the development of monitoring methodologies and indicators to measure the environmental impact and sustainability of seaweed cultivation; 9)fund, in 2023/2024, pilot project(s) supporting the reorientation of fishers’ careers from fishing to regenerative ocean farming; 10)enhance targeted support for innovative SMEs and projects in the algae sector through the scaled-up activities of the BlueInvest Platform; 11)starting in 2023, facilitate sea basin and macroregional cooperation by promoting innovative interregional partnerships (e.g. the blue bioeconomy, focusing on algae), through smart specialisation strategies and the 3S Sustainable Blue Economy Platform. 4.3.Close knowledge, data, technological and innovation gaps Technological developments, innovation and better knowledge are crucial for boosting regenerative algae cultivation and production in the EU. The availability of reliable information on the EU algae sector, including socioeconomic and environmental data, is currently limited. This slows down the development and mainstreaming of algae production markets. Determining the potential of algae to contribute to achieving the European Green Deal goals requires a targeted collaborative research effort that can be provided by the EU Horizon Europe programme, including through dedicated calls of Sustainable Blue Economy Partnership and the EU Mission: Restore Our Ocean and Waters by 2030. The main algae production methods are in the process of being developed (see Figure 6), but there is a need to develop innovative equipment to increase productivity in the algae sector and the quality of algae-based products. Such equipment could include large-scale (possibly automated) cultivation and processing systems, monitoring probes with control-command systems, etc. that can reduce unpredictable biomass loss and labour costs. Innovative equipment can also play a crucial role in improving downstream processes, such as biorefineries for the treatment of the entire biomass of macroalgae and microalgae, not just a small volume of active components while the rest of the biomass is wasted. There is also a need to remove systemic innovation barriers and accelerate market access to algae-based products. Better knowledge of environmental impacts of wild seaweed harvesting and the amounts of seaweed washed up on EU coasts should also be acquired, to assess what amount of this type of biomass can provide sustainable business opportunities for EU companies. The algae cultivation sector would certainly benefit from an EU-wide centralised approach of maintaining European seaweed strains. This approach would also help conserve seaweed biodiversity.