Why does it matter? Aquaculture is the fastest growing segment of the global food industry, with production projected to rise 17% by 2032 compared to 2022. That growth is colliding with a structural constraint – reliance on wild-caught fish for feed is increasingly unsustainable, given widespread overfishing and increasingly unpredictable climate patterns. More than 37% of global fish stocks are already overfished and seven of the world’s top ten fisheries by volume target wild forage species that are the cornerstone of marine food webs.

Funding the transition – The report frames algae as one part of the solution, recommending it sit alongside fish by-products and other alternatives rather than replace fish-based feed outright. Proposed support includes tax incentives, phased-out subsidies for unsustainable fish-based feed inputs, blended finance for early-stage projects and inclusion of algae-based feed within the EU Taxonomy for Sustainable Activities.

Making it commercial – Producing algal oil at scale is energy-intensive and currently more expensive than fish oil from dedicated feedstocks, but cost and performance improve when producers use waste streams instead, such as MiAlgae’s use of co-products from whisky distilling. Heterotrophic fermentation, the method used by Corbion and Veramaris, costs around $14,500 per mt of oil, broadly comparable to fish oil, and is most competitive when sourced from co-products, offering a supply chain insulated from an increasingly unpredictable environment. Protein from the black soldier fly, produced by companies such as Enthos, also offers an alternative protein source to replace fishmeal, as explored in our previous blog.

Peru’s warning sign – The case for insulating aquafeed from wild fish supply shocks is playing out in real time. Peru, which produces around 20% of the world’s fishmeal, has extended its suspension of anchovy fishing in its principal North-Central zone multiple times this year, after warming ocean conditions linked to a coastal El Nino event drove up the presence of juveniles in catches.

Back to the source – Understanding why the Commission is turning to algae requires understanding the key ingredients forage fish provide in aquafeed. EPA and DHA are the omega-3 fatty acids essential to fish health and the industry has traditionally relied on smaller fish to pass these nutrients to larger farmed fish such as salmon. Fish do not produce these fatty acids themselves – they accumulate them by eating algae, or by eating smaller fish that have themselves consumed algae. Algal oil bypasses this wild-catch stage entirely. The European Commission calls this a “more direct, logical, and higher-quality source”, replacing an unpredictable harvesting chain with a controlled, land-based fermentation process.

Cleaner by design – The report also urges policymakers to apply the “as low as reasonably achievable” (ALARA) principle when contaminant limits under Directive 2002/32/EC are next revised. Pollutants in oceans and rivers leave fish carrying increasing concentrations of dioxins and PCBs, passed on in greater quantities further up the food chain. Because algae can be fermented in a controlled environment, a cleaner contaminant profile could become a competitive advantage over fish oil, not just an environmental one. Research also suggests black soldier flies would benefit from this revision, dependent on the type of feed they receive.

The bottom line – Algal oil marks a genuinely exciting shift for aquafeed, offering a stable source of EPA and DHA insulated from the volatility plaguing wild fisheries. However, the protein element remains unresolved. Algae meal inclusion rates are still modest and processing technology has not matured enough to displace fishmeal’s protein content at scale. Until that gap closes, alternatives such as Enthos‘ black soldier fly larvae, converting organic waste into protein meal and oil, may prove a more viable near-term solution. Algae’s real promise, for now, lies chiefly in oil.