MPA designations, falling fish prices to hurt Irish fleet’s profitability

Ireland’s fishing industry is facing down the double barrels of market headwinds and a plan to decommission part of the Irish fleet and a move to ban fishing in 16,000 square kilometers of ocean.

Irish fishermen say they weren’t consulted in a decision by the European Commission to close 1.8 percent of Irish waters to bottom-fishing, including parts of the Northeast Atlantic, including 9,000 square kilometers within Ireland’s exclusive economic zone.

The E.U. decision will see deep-sea fishing using gear such as trawls, gillnets, and bottom longlines, banned in 87 so-called “sensitive zones.” The areas were highlighted in an early proposal on MPAs by Irish environmental coalition Fair Seas, which identified 16 areas of interest for MPA designation in Irish waters. The Irish government is preparing legislation to designate 30 percent of the nation’s federal waters as protected, up from 2 percent currently designated in MPAs.

Irish Fish Producers Organization CEO Aodh O’Donnell told SeafoodSource the move would mean a “major displacement,” potentially forfeiting between 10 and 20 percent of the catch of the Irish langoustine fleet that traditionally fish the Porcupine Bank catching grounds.

“This valuable langoustine fishery is managed on a long-term sustainable basis and Irish vessels normally rest this area for four to five months annually, as an important long-term conservation measure,” he said.

According to O’Donnell, the E.U. implementing regulation is “flawed in that it has been introduced without the necessary stakeholder consultation and the normal impact assessments, contrary to the social dimension pillar of the common fisheries policy.”

O’Donnell said the proposed West of Ireland Porcupine Bank area closures “will lead to fishing vessels moving towards other fishing zones, and to a disruption of fishing activities with unaccounted social impacts on a traditional segment adjusting to heavy losses of quota and fishing opportunities under Brexit.”

Fair Seas Campaign Manager Aoife O’ Mahony said Ireland’s ocean territory “is home to endangered sharks, globally important seabird colonies, and animals threatened with extinction.”

“It is vital that we act now to restore critical habitats, safeguard wildlife, and help address the climate crisis,” O’Mahoney said.

Irish Wildlife Trust Marine Policy and Research Officer Regina Classen said the areas to be protected are home to cold water coral reefs, deep sea sponge reefs, and sea-pen fields which are easily damaged by bottom-contacting fishing gear.

“Not only are we now protecting fragile deep-sea reefs from bottom trawling, but even a part of the Porcupine Bank, which is heavily trawled for Dublin Bay prawn, is now protected due to the presence of sea-pens,” she said in a statement.

Ireland’s catching sector was already expected to see significant decreases in revenue and profitability this year, according to preliminary data for 2021-2022, published in the first of what is expected to be an annual fisheries report produced by Bord Iascaigh Mhara (BIM), Ireland’s seafood trade promotion group.

The report found the Irish fleet’s revenue increased by 2 percent in 2021 over the previous year, amounting to EUR 312 million (USD 304.5 million). At the same time, its gross value-added (GVA) increased 6 percent to EUR 161 million (USD 157.1 million), and gross profit climbed 24 percent to EUR 65 million (USD 63.4 million), but that partly due to COVID-19 factors, its net profit decreased 20 percent to EUR 32 million (USD 31.2 million).

In volume terms, the fleet landed 218,600 metric tons (MT) of fisheries products in 2020 and 233,000 MT in 2021. However, in its economic performance outlook for 2022, the report states that despite a 6 percent increase in landings by weight from 2020 to 2021, projected annual revenue for 2021 will fall 9 percent to EUR 283 million (USD 276.2 million), GVA will fall 26 percent to EUR 120 million (USD 117.1 million), and gross profit is predicted to decrease by 58 percent to EUR 27.6 million (USD 26.9 million), and net profit will slide 75 percent to EUR 8.1 million (USD 7.9 million).

These results are expected to stem from a 7.5 percent drop in the landings value, brought by lower fish prices. Furthermore, BIM’s outlook forecasts a further decrease in economic performance in 2022, driven by a decrease in landings and rising operational costs. As a result, the Irish seafood sector is predicted to pull in greater revenue and net profit, but a decrease in GVA and gross profit driven primarily by rising inflation and unprecedented energy costs.

Mackerel was the most-valuable species caught in Irish waters in 2021 by total value, and also tops in volume, with over 74,000 MT landed, up 5 percent from 2019. But landings of nephrops (langoustines) declined by 30 percent in weight after a difficult year in which many of the main international markets for the species were shut down because of the pandemic.

BIM’s report also provides economic justification for a EUR 80 million (USD 79.8 million million) scheme to retire a third of the Irish fishing fleet between June and November 2022. The tie-up scheme will allow the industry to absorb the impacts of rising fuel costs for some segments of the fleet and the reduced access for fishing quotas as a result of Brexit.

It suggests that in the long-term, decommissioning will help to bring fleet capacity back in balance with available quotas and improve the profitability for those vessels that remain.

In 2020, there were 1,938 registered vessels in Ireland’s fleet. Of these, 1,391 fishing vessels were active, down 8 percent from 2019. Some 81 percent of these vessels were under 12 meters in length and mainly operate in inshore waters.

The report also documents the threat posed by rising fuel and energy prices on the Irish fleet. It advises that in 2020, average fuel costs per liter were EUR 0.42 (USD 0.41), whereas in mid-2022 the average stood at EUR 0.90 (USD 0.88), representing a 114 percent increase. In 2020, the Irish fleet consumed 101 million liters at a total cost of EUR 42.4 million (USD 41.4 million), representing 15 percent of all its operating cost. Based on the average fuel price in 2022, it calculates that if the fleet was to consume the same volume as it did in 2020, it would cost at least EUR 90.9 million (USD 88.7 million), representing 28 percent of the fleet’s potential operating costs.

The report found if fuel prices and other operating costs such as insurance, repair, and maintenance remain level or continue to increase further, there is a “considerable risk” that many fishing fleets will begin to operate at a loss, forcing vessels to tie up.

The increase in operational costs is particularly challenging for vessels that have crew shares, as there are reduced wages for crew once fuel and other operational costs are removed from the boat’s income, BIM said.

Additional reporting by Jason Holland

Photo courtesy of BIM