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An Atlantic salmon at the KUTERRA closed containment recirculating aquaculture system (RAS) facility in 'Namgis First Nation seen here February 19, 2015 near Port McNeill, BC.

John Lehmann/The Globe and Mail

In a clearing near Port McNeill, an experiment is under way. Inside an unassuming steel-clad building, thousands of Atlantic salmon swim in circular tanks.

When those fish are big enough – in about 12 months, when they have grown from 100-gram smolts to between three to five kilograms in weight – they will be harvested, having never touched the ocean. Their waste will be processed into garden soil. Water, almost all of which is recirculated, comes from nearby wells and the plant is highly automated.

"Our three major costs are feed, smolts and labour," Jo Mrozewski, a spokeswoman for Kuterra Limited Partnership, said during a recent tour of the facility. "So we do what we can to try to break all of those [processes] down and the automation is part of reducing those costs."

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Kuterra is a front-runner in the quest to prove Atlantic salmon can be raised on land in a way that is more environmentally friendly than the ocean-based systems used to raise the fish, an aquaculture staple worldwide since the 1960s. It reached a milestone last April, when its salmon hit the market. But questions remain, including whether the costs – including equipment, power and food – of raising Atlantic salmon entirely on land outweigh potential profits.

Owned by the Namgis First Nation, Kuterra is part of a global evolution in which producers are scrambling to balance consumer demand, environmental concerns and technology to raise more fish for a growing population. Globally, aquaculture accounts for nearly 50 per cent of all seafood harvested for human consumption. By 2030, that share is projected to rise to 62 per cent as catches from wild fisheries level off and demand from an emerging global middle class increases, the Food and Agriculture Organization of the United Nations said in a 2014 review.

Kuterra, which uses a recirculating aquaculture system, or RAS, is showcasing the purported advantages of land-based salmon production. Those include less need for antibiotics, pesticides and other chemicals; a contained system that keeps contaminants, including fish waste, out of the ocean; and a readily controlled environment that lets producers use about 30-per-cent less feed than would be required in ocean pens to raise the same amount of fish.

RAS, often referred to as closed-containment technology, has been around for decades and is widely used in hatcheries as well as for raising species of fish including sturgeon. Kuterra and a handful of other players want to use the technology to raise Atlantic salmon to maturity. The experiment is particularly relevant in British Columbia, where salmon farms date back to the 1970s and have been a source of contention over concerns including the potential spread of disease from farmed to wild fish.

In 2012, the Cohen Commission – a public inquiry into the decline of Fraser River sockeye salmon run – issued recommendations that included a moratorium on new salmon farms in the Discovery Islands, near Campbell River, until 2020, citing scientific uncertainty around the impact of farms on wild salmon. Controlling sea lice has become a major issue in Denmark's farmed-salmon sector, fuelling interest in RAS alternatives.

"The economics for hatcheries have always been there [for RAS]. It's great, with lots of biosecurity for growing the best fish possible. For growout – rearing to market size – until five years ago or so, it was probably a little too expensive," said Rob Walker, president of AgriMarine Technologies Inc., which makes aquaculture equipment and runs its own fish-farming operations.

"But there's a huge push globally to move not just salmon, but all kinds of species into these better-controlled systems. It's about management of stock – the ocean is an incredible place, but it's also uncontrollable. And as with anything, the more control you have, the better you can manage."

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Fish raised in land-based systems can appeal to certification programs set up to safeguard wild fish stocks and the environment. SeaChoice, for example, gives a red or "avoid" ranking to net-pen-farmed salmon from B.C., but a "best choice" ranking to land-based farmed Atlantic salmon.

Profits are another question. Danish land-based Atlantic salmon producer Langsand Laks recently reported a financial loss for 2014.

In a letter to a trade journal last year, Karl Iver Dahl-Madsen, a consultant and former president of Dansk Akvakultur, a Danish industry group, predicted new RAS salmon operations would "lose their investors' shirts," and said land-based systems for salmon farming are five to 10 times more costly than sea-cage systems.

In an e-mail, Mr. Dahl-Madsen stood by those opinions and also claimed disease-related benefits of land-based systems have been overstated.

"If a sea-cage farm is placed in an open location with high currents and at a sufficient distance from other farms, the risks [of spreading sea lice] are negligible," he said.

Mr. Dahl-Madsen also cited issues of fish quality and fish welfare, saying land-based systems require fish to swim in higher densities than net-cage systems. Kuterra says its systems have been designed to give the salmon – which naturally swim in groups – enough room to prevent stress.

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Marine Harvest, the biggest Atlantic salmon producer in B.C., foresees a combination of RAS and ocean-cage technology, saying RAS technology has evolved even since Kuterra began operations in 2013.

Kuterra has received financial backing from the federal government as well as Tides Canada. Constructions costs were about $9-million and there are currently five full-time employees.

"Our projections are that we will break even in 2016 and the year after that we'll actually show a profit," Ms. Mrozewski said. "The mission of this project is to prove the technical, biological and economic viability of doing this."

Fly larva gives hope for sustainable fish farms

One of the knocks against aquaculture has been its tendency to forage down the food chain. Traditionally, diets for farmed carnivorous fish such as salmon have contained between 30 to 50 per cent fish meal and oil, which is obtained from wild-caught "industrial" fish, including sardines and mackerel.

As the amount of fish being raised through aquaculture has increased, the demand for meal to feed to the farmed fish has grown, fuelling a search for alternatives.

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At Enterra Feed Corp., that alternative comes in the form of black soldier flies, specifically their larvae, which are hatched, fed cast-off fruits, grains and vegetables (the organic material comes from, for instance, grocery stores and food-processing operations, and excludes "post-consumer" waste from hotels, restaurants or consumers) and then processed for use in animal feed.

Enterra's Langley plant has a capacity to process 100 tonnes of food waste per day. Larvae are harvested about two weeks after they hatch and the finished product consists of more than 80 per cent protein, said Enterra chief executive officer Brad Marchant.

"It's a direct substitute for fish meal," Mr. Marchant said, adding that the idea is to provide feed manufacturers with a stable, consistently priced product.

Enterra has obtained approval to sells its product in six states and has applied for approval from the Canadian Food Inspection Agency to use the larvae product as a feed ingredient for fish and livestock in Canada.

Enterra's grubs feed on material that companies would otherwise have to put in compost, landfill or get rid of through other means. An estimated one-third of food produced globally each year for human consumption, or about 1.3-billion tonnes, is lost or wasted, according to the FAO.

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