Final Report Summary - WHITEFISH (Automated and differentiated calculation of sustainability for cod and haddock products)
Executive Summary:
The European whitefish catch and processing industry is dominated by SMEs, and it is currently facing several challenges. Worldwide many stocks have collapsed, and environmental organizations warn against consuming captured whitefish. Strict regulations with respect to documentation and traceability have been imposed on the European captured fish industry in the last few years, and fulfilling these generates significant additional cost. While some cod/haddock stocks, particularly in the north-east Atlantic, are still healthy and sustainable there is a an additional problem for these species when they get to the market due to competition from other cheap, but not necessarily sustainable or nutritious, captured or farmed whitefish species. The goal of the WhiteFish project was to strengthen the competitiveness of the European cod/haddock industry by enabling the documentation of the desirable characteristics of whitefish caught in the north-east Atlantic, in particular relating to sustainability (stock, environmental, economic and social).
In the WhiteFish project, extensive sustainability assessments were carried out in 4 different cod/haddock chains, encompassing environmental (LCA-based), social and economic sustainability. Based on these assessments, a simplified model for Batch-based Calculation of Sustainability Impact (BCSI) was developed where, by recording only a few additional data elements, companies could get a day-by-day picture of the sustainability of each batch they are producing. This enables differentiated calculation of sustainability impact, so that products that look identical may be shown to have different properties, for instance related to CO2 emissions, profitability or working conditions. It also enables sustainability assessments to be integrated into business decisions, as managers will know that making less sustainable decisions (for instance related to where to catch, or who to buy from, or what to buy) will show up in the “sustainability account”. It is worth emphasizing that the BCSI method and the simplified and batch-based sustainability assessments is designed mainly for industry (particularly SME) self-assessment over time, but some early adopters have already found that it can be a useful and valuable tool when communicating with (potential) customers, to highlight what the company is doing in relation to sustainability. At the end of the project and after an open hearing period, the data recording recommendations in the BCSI, and the simplified sustainability assessment method was formulated as a low-level voluntary industry standard (a CEN Workshop Agreement) which will live on and be used after the project has finished.
Project Context and Objectives:
Background and problem
Cod and haddock products originating in the North East Atlantic and processed in Europe come from sustainable stocks, are healthy to eat, and preliminary studies show that they are associated with comparatively low negative environmental impact. In an ideal world this would give these products a competitive advantage and higher price in the market, but currently this is not the case. There are various reasons for this:
• Competition from cod and haddock products originating from non-sustainable stocks elsewhere in the world
• Competition from exported cod and haddock products processed cheaply in Asia and imported back to Europe
• Competition from products from farmed whitefish (mostly pangasius and tilapia which are far less healthy species to eat) imported to Europe
• Pressure from environmental organizations not to eat cod or haddock, as most cod or haddock stocks in the world (with practically the only exception being the North East Atlantic stocks) are deemed vulnerable or threatened, and catch on these stocks is deemed unsustainable
• New strict and costly EU / EEA regulations on how to document the catching process and how to document the origin of the fish imposed on the industry
• Lack of differentiation in the market, so that the desirable characteristics of these products relating to the sustainability of the stock, the low associated environmental impact, the high nutritional value and the guaranteed transparency and legality of the catch is in practice almost ignored by the retailer and consumer
The final problem on the list above, the lack of differentiation in the market, is the most serious, and it is the only problem that the industry can attempt to overcome. It is and should be legal and acceptable to import products from cod, haddock or other species to Europe; it is not unnatural for the environmental organizations to focus on species rather than stocks, and the EU legislation is necessary to document that the catch originates from a sustainable stock and is legally caught and landed. If the European North East Atlantic cod / haddock industry is to survive and thrive, it needs to profile the desirable characteristics of their products in a way that is relevant and understandable to the consumer.
Solution
The solution to this problem lies in the increasing environmental awareness of many retailers and consumers, especially related to the potential for climate change. While by no means all consumers care about this issue enough to let it influence their buying decisions, the clear trend is that more and more do, which is why major retailers like Wal-Mart has committed to so called ‘green strategies’ which entail calculating and displaying the environmental impact (EI) of a significant range of their products. EI might be indicated by the distance the food is transported from the time of its production until it reaches the consumer, so called ‘food miles’. This is a number and a concept that is fairly easy to understand, but it can be very misleading as distance travelled does not automatically translate to actual EI. Slightly more advanced and accurate is the calculation and display of associated CO2 emissions. While this is a better indicator of EI, it fails to take into consideration other issues, like acidification, ozone depletion, eutrophication and use of non-renewable resources. Life Cycle Assessment (LCA) takes all these and many other factors into consideration when estimating impact. It is a technique designed to assess impact associated with all the stages of a process, from raw materials through materials processing, manufacture, distribution, use, repair and maintenance, and disposal or recycling. With LCA it is only possible to calculate the impact on the environment, but the impact on sustainability in general, taking into consideration social and economic aspects should also be incorporated. This is done by including economic and social aspects of sustainability into account as well. The generic term for what is calculated by using LCA, economic and social assessment is known as Sustainability Impact (SI) and one option for the cod/haddock industry would be to undertake EI/SI calculations on a large scale and use the results to profile the desirable properties of their products. Unfortunately, to use current methods to document EI/SI suffer from a number of disadvantages:
• The calculation of EI/SI is performed by external experts, and it is costly and time-consuming.
• The calculation of EI/SI is a once-off exercise that gives you a snapshot of the current situation; it is not something you do as part of your everyday business processes.
• Using LCA or simpler methods for environmental impact will get you average numbers for a product or a process only. If you calculate food miles or CO2 emissions for your products using the current methods, you will get one average number to put on all your products, regardless of where the product in question actually came from and regardless of what supply chain it actually went through.
What the cod/haddock industry really wants is a method for calculating EI/SI without these disadvantages; a method that they can use internally, frequently and cheaply, one that give them actual numbers for EI/SI and not just a product type average, and ideally a method where the data acquisition and calculation is close to automated, using the numerous recordings that they already have in their legally required traceability systems as basis.
The title of this project was “Automated and differentiated calculation of sustainability for cod and haddock products” or WhiteFish for short, and the project goal was to develop and validate such a method, for future use in particular in the SMEs in the cod/haddock supply chain so that they can document the sustainability of their products and processes, gain a competitive advantage through improved market access, price and consumer preference, and thrive as an industry.
Project objectives
The overall WhiteFish objective was to strengthen the competiveness of the European cod and haddock industry by documenting and disseminating the relevant and desirable characteristics the products have, in particular in relation to sustainability, environmental impact and transparency.
The specific WhiteFish objectives are as follows:
• To develop a method called “Batch-based Calculation of Sustainability Impact” (BCSI) which is based on the data already recorded by the industry, which can be used by the industry itself, and which enable specific EI/SI calculations on individual product batches.
• To test and validate the BCSI method in three different cod/haddock supply chains. To train the SMEs in those chains to use the method thus ensuring that it is suitable for the intended target group.
• To produce guidelines for SMEs on how to calculate sustainability impact in the captured fish industry using the BCSI method.
• To produce recommendations for SMEs with respect to what data related to sustainability they should record regularly to automate the EI/SI calculation process.
• To publish the details of the BCSI method as a low level European standard (a CEN Workshop Agreement or CWA) to ensure transparency, impartiality and widespread uptake.
All these objectives were achieved within the project, the method and the recommendations have been tested, validated and subjected to an open hearing, and has been published as a low-level European voluntary industry standard (CWA)
Project Results:
Notable S/T results
The main S/T product in the project is the methodology for Batch-based Calculation of Sustainability Impact (BCSI), enabling calculation or enumeration of day-by-day estimates of environmental, economic and social sustainability associated with catch and processing of cod and haddock products. The BCSI methodology was used to estimate environmental impact in the 4 case study chains, and it is the core of the BCSI that constitutes the recommendations in the CEN Workshop Agreement (CWA) “Batch-based Calculation of Sustainability Impact for Captured Fish Products” that was one of the main outcomes of the project. A CWA is a low-level voluntary industry standard, and publishing the BCSI methodology as a CWA ensures that it will live on and be accessible also after the project has finished.
Below some background and details about the development and the content of the BCSI:
Background for BCSI development
The basis for the final version of the BCSI was:
• D1.2 – At the beginning of the project the SME-AGs and SMEs had indicated the properties they wanted the BCSI to have (‘simple to use’ being the foremost of these)
• D3.2 – Extensive data collection was carried out in all pilot cases, based on a lot of potential indicators for documenting sustainability
• D4.2 – Extensive sustainability impact assessment was carried out in all pilot chains, based on all the data collected
• D2.3 – Based on all the data available and on the analysis of how much each indicator contributed to the respective sustainability impacts, the scientists made a recommendation to the SME-AGs and the SMEs on what data it might be desirable to include in the final version of the BCSI and in the European standard
Going from BCSI III to final version of the BCSI and the CWA
After the scientists’ recommendations in BCSI III were finalised there was significant consultancy with -, and feedback from the industry, both outside of -, and within the project. Roughly, the process went as follows:
1. The BCSI III recommendations were finalised and sent to the industry and organization representatives in WhiteFish
2. Mail exchanges, written questions and feedback within the project, draft of a document outlining what was accepted by the industry, and what needed to be discussed further
3. Local meetings between the respective research institutes and the industry and organization representatives, making suggestions and raising questions and issues
4. More mail exchanges, updating the draft of what industry accepted
5. Telephone meeting within the project with extensive point for point discussion of the recommendations and the industry views on each
6. CWA kick-off meeting in June 2014, also open for other participants
7. Draft first version of the CWA produced based on the internal industry recommendations in WhiteFish and on the discussions at the kick-off meeting
8. Wide circulation and presentation of the CWA draft also outside the project
9. Feedback on the content of the CWA, updating the recommendations
10. CWA consensus meeting in November 2014, also open for other participants
11. Some editorial changes suggested and accepted, but overwhelming consensus supporting the applicability and relevance of the standard; practically all industry representatives at the consensus meeting signed off on the standard
As the WhiteFish project ends, the WhiteFish CWA is in its final form. There is, however, a ‘waiting period’ while CEN (who will become the custodians of the CWA after the WhiteFish project finishes) checks for consistency and potential conflict with other standards (which in our case is extremely unlikely), and this means that at the time of writing we’re still waiting for CEN to finalize the process, to assign a number to the CWA, and to start distributing the standard.
The difference between BCSI III and the final version / the CWA
BCSI III, as documented in D2.3 represented the scientist’s recommendations to the industry on what data should be recorded. The final version of the BCSI represents the industry’s considered selection from the scientists’ recommendations. At the end there was a large degree of overlap between what the scientists recommended and what the industry selected to include in the final model, but this overlap was not complete.
Environmental sustainability – Scientists recommended:
The traditional impact categories were ranked with climate change in first place, followed by acidification, particulate matter, ozone depletion, ionizing radiation and human toxicity
Environmental sustainability – Industry chose for BCSI / CWA:
Focus on climate change (‘shall’ element in the CWA), the other impact categories recommended (‘should’ element in the CWA)
Biological sustainability – Scientists recommended:
Stock sustainability: based on ICES reports, IUCN, or any other type of stock management report
Biological sustainability – Industry chose for BCSI / CWA:
‘Fishery descriptive status’ as mandatory element with ICES report as an example, ‘Fishery quantitative status’ as recommended element
Economic sustainability – Scientists recommended:
Profitability and production risk
Economic sustainability – Industry chose for BCSI / CWA:
‘Profit per batch’ mandatory, ‘Labor used per batch’ optional, production risk calculated as coefficient of variation
Social sustainability – Scientists recommended:
In order of importance, to record and pay attention to data on:
Freedom of association, Timely payment of salaries, Pension fund contribution, Worker safety, Professional pride, Job satisfaction, Healthy working environment, Salary level
Social sustainability – Industry chose for BCSI / CWA:
Mandatory: Freedom of association, Timely payment of salaries, Worker safety
Recommended: Pension fund contribution, Professional pride, Job satisfaction, Healthy working environment, Salary level
Most of the recommendations made were in one form or another accepted by the industry and incorporated into the final version of the BCSI and the CWA. The most controversial issue somewhat surprisingly turned out to be biological sustainability, and how to document it. This was surprising because biological sustainability was not the main focus of the WhiteFish project; the project description clearly says “In the WHITEFISH project we will not advance beyond the state-of-the-art when it comes to calculations of stock sustainability. In the BCSI calculations the fact that the stock is sustainable, and that catch on the stock is in accordance with ICES recommendations is an important and explicit checkpoint, but we do not make calculations related to stock sustainability in itself.”. Still, it turned out that both scientists and industry representatives had strong and somewhat conflicting views on the validity and relevance of various external evaluations of stock sustainability (including ICES, and in particular the IUCN red-list), so this (in the context of WhiteFish) tiny issue was probably debated more than all the other recommendations put together.
User guide for the final version of the BCSI
The final version of the BCSI is a set of requirements and recommendations for what data to record in the captured fish industry in order to document environmental, economic and social sustainability. When it comes to environmental sustainability the final version of the BCSI also contains methodology describing how calculations can be made based on the recorded data so that an estimate of emissions can be produced on single batch level. The final version of the BCSI has been formulated as a voluntary European industry standard; the WhiteFish CWA documented in D2.5. For details about exactly what the data recording requirements are, see D2.5.
The following sections contain some background material for users of the standard; it is meant to explain what the standard / the BCSI method is for, who the expected users are, and what using the standard / the BCSI entails. Some of this background material is also included in the standard itself to make the document self-sustainable.
Who is the BCSI for?
If you are a fisherman, a fishing vessel owner or a processor and you want to know about sustainability on batch level, this method will tell you what data you should record, and how that data should be interpreted. It is worth pointing out that the methodology outlined is mainly intended for self-assessment and for monitoring own sustainability over time.
The potential users of this method may include:
• fishermen, fishing vessel owners and other suppliers of wild caught fish
• processors, transporters and buyers of wild caught fish, e.g. wholesalers or supermarket chains
• research institutes with focus on sustainability and related research
• Non-Governmental Organizations (NGOs) with interest in the wild-caught fish industry
• certification organisations with interest in the wild-caught fish industry
What do you need to do before using the BCSI method?
When it comes to data recording and subsequent qualitative self-assessment related to economic and social sustainability the BCSI should be fairly self-contained and ready to use by the industry. When it comes to data recording and subsequent quantitative self-assessment of environmental sustainability most companies are likely to need some help, at least initially. In two areas related to environmental sustainability in particular it is likely that some help is needed:
1. For the adopters of this method it is mandatory to record data about activities, processes and resource use that have significant impact on climate change, and it is recommended to record data about activities, processes and resource use that contribute significantly to other impact categories, but not to climate change. For climate change the impact is measured in kg CO2 equivalents or kg CO2e. To be able to make this calculation, the company needs to know the kg CO2e contribution for each kg of fuel and lubricant they use, for each resource they use when producing, for each transport type they use, and so on. The contribution to other impact categories is measured in different units, and the multiplying factors associated with fuel and lubricant type, resource use and transport type for the other impact categories must also be established if the company wishes to calculate environmental impact in these categories. To get a good estimate of these multiplying factors, the company should contact an industry organization in their field, or scientists or consultants who work with sustainability impact assessment and who has knowledge of the details of fisheries and seafood production in the given company, region and country.
2. Similarly, if this method is to be used to calculate sustainability impact relating to production, the company should also ask an industry organization, consultants or scientists to advise them on which resource types that it is necessary to record usage data on (and what the contribution to environmental impact is, per kg or amount of that resource type). This method does not refer to an exhaustive list of all possible resources used in the production of seafood products; the company aided by experts must decide on which ones are relevant, given the impact categories they wish to calculate contribution to.
How to measure and quantify environmental sustainability
There are many ways environmental impact can be measured and quantified. In this method the following impact categories for environmental impact have been chosen:
• Impact on climate change, measured in kg CO2 equivalents (per kg fish product)
• Impact on ozone depletion, measured in kg CFC-11 equivalents (per kg fish product)
• Impact on particulate matter, measured in kg PM2,5 equivalents (per kg fish product)
• Impact on ionizing radiation, measured in kg U235 equivalents (per kg fish product)
• Impact on acidification, measured in kg molc H+ equivalents (per kg fish product)
• Impact on human toxicity – cancer, measured in kg CTUh (per kg fish product)
Use of various resources contributes in different degrees to the respective environmental impact categories. Use of some resources may have significant impact in one category, but have negligible impact in another category. For the users of this method it is mandatory to calculate the impact on climate change and to record use of those resources that significantly contribute to it. It is recommended to calculate the impact in the other categories and to record use of those resources that significantly contribute to these categories. The users of this method can choose which impact categories in addition to climate change they want to keep track of their contribution to; see below.
Relationship between LCA and BCSI
Life Cycle Assessment (LCA) is a generally accepted method to determine the environmental impact of a product by listing all resources used over the entire life cycle and assigning related emissions and impacts to the appropriate environmental impact categories. While LCA was used in various pilot cases to establish the principles and recommendations underlying this method, this method is in no way a replacement or substitute for LCA. LCA is well defined and can be used to compare any chains and products; the BCSI method is less accurate (and far simpler), and is designed for self-assessment in the wild-caught fish chain only. When using LCA decisions have to be made about what functional unit to use (what unit to assign the environmental impact to), what the system boundaries are, and what principle to use when allocating environmental impact to a process with multiple outputs. Using BCSI these decisions have already been made; the functional unit is 1kg fish product in a given batch, the boundaries only include the links and data elements indicated, and allocation of environmental impact to a process with multiple outputs is based on respective weight (mass allocation).
Calculation of economic impact
Indicators for economic sustainability related to the fishing and processing operation may include profit, net weight per species, fuel amount used when fishing and labour input. No additional calculations are required for these indicators, but they do require interpretation. Interpretation of indicator values per batch is relatively straightforward: profit and net weight per species should be as high as possible, whereas fuel amount used and labour input should be as low as possible.
Indicator values for economic sustainability can also be examined over time, which provides insight into variability and sources of variability. Such variability can either be visualized through graphs or calculated by calculating coefficient of variation for each of these indicators. By expressing these factors as coefficients of variation, companies can identify the main source of variability, and reducing this variability will reduce production risk.
Indicator values for economic sustainability can be interpreted in relation to indicator values for other pillars of sustainability. Given that indicators for environmental sustainability are recorded per batch, economic indicator values can be interpreted in relation to environmental indicator values. If a company has recorded a batch with low profit in comparison to other batches, but also with low emissions of CO2e in comparison to other batches, this may not be a particularly sustainable batch for this company since the batch did not have a sufficiently positive impact on profitability.
Calculation of social impact
Data recording requirements for social impacts of companies are related to 8 specific indicators listed in the final version of the BCSI and the CWA. For details on how the data may be interpreted, see the respective indicators in D2.5.
Calculation of environmental impact in general
The following constitutes a rough step by step guide to calculating environmental impact using the BCSI:
1. Select which environmental impact categories in addition to climate change you want to keep track of your contribution to, if any.
2. Select which links in the supply chain you want to record data about resource use in. Note that if there are links earlier in the chain that you do not cover, you need to establish a way of getting access to the data on the environmental impact generated there. One way of doing that is to encourage your suppliers to use BCSI, and to pass the calculated respective impacts on to you.
3. For processes where there is waste or by-products, establish what fraction or percentage of the “received” impact should be assigned to the main output of the process (mass allocation).
4. Select which resource uses you need to keep track of in the respective links. Some resource types (like fuel use during the fishing operation) are specified as part of the BCSI; some resource types are relevant only if they contribute to at least one of the impact categories you have chosen.
5. For each resource, establish what the contribution is from 1 unit of that resource to the respective impact categories you have decided to track your contribution to.
6. For each resource not directly connected to the batch (for instance use of electricity, gear materials or hull materials) establish how to assign use of this resource to a particular batch.
7. Start recording resource use and calculate environmental impact per batch
8. Produce reports and statistics, look for trends and improvement potential when it comes to environmental impact per batch in your company
For many of these points, it may be beneficial to do an initial consultation with experts to advice on the selections and to configure the calculations. After this initial consultation, if there are no major changes in production or type of resource used, each company should be able to record data and perform the calculations without any outside assistance.
Calculation of environmental impact in relation to climate change
For each relevant resource type the factors that indicate how big the contribution to climate change for 1 kg of the given resource must be established. The emissions of other gases than CO2 are converted into CO2 equivalents based on how big a contribution they have to climate change compared to CO2 emissions, and this measurement is denoted CO2e. This means that contribution of the use of a resource to climate change is measured in kg CO2e per resource unit, and we multiply this factor by the amount used to get the total kg CO2e for the whole batch. Kg CO2e per kg fish product is obtained by dividing this number by the batch net weight.
For details of how the calculation of environmental impact is carried out, see the CWA or WhiteFish deliverable D2.4.
After catch follows some sequence of processing and transport, and there may be many processing links with or without transport in between. The key principle when calculating total impact further down the chain is to establish the total kg CO2e associated with the input(s) to this process , and also to establish what fraction of these “received” CO2e emissions should be associated with this process, see also below). If you have access to all data regarding production and resource use from all links in the supply chain up to and including your own link these numbers can be calculated link by link. If you do not have access to all these data from the previous links you depend on receiving these numbers from your suppliers.
The percentage / fraction (C) depends on yield and waste. In simplified terms the outputs of a process can be classified as “main product” (indicated in (A)), “by-products” (which we do not calculate the impact for here, but which still get assigned their share of the impact “received”) and “waste” (which do not get assigned their share of the impact “received”). “yield” is net weight of the production batch (A) divided by the total weight of the catch used to produce this production batch.
A simple estimate of (C) can be obtained by calculating “yield” divided by (1-“waste”) so that for instance a yield of 60% will give:
• For waste = 0% (no waste): C = 60% / 1 = 60%
• For waste = 10% (some waste): C = 60 % / 0,9 = 66,67%
• For waste = 40% (all other received material go to waste): C = 60% / 0,6 = 100%
Note that the amount of resource used is for this one batch only, so that means that if there are any relevant resources used that are not directly connected to the batch, the resource use and corresponding kg CO2e emissions must be allocated to this batch as indicated in 5.3.3 above.
Calculation of environmental impact in other impact categories
Exactly the same principle applies as indicated above. For each resource used the contribution to the respective impact category type per unit resource must be established,, and then the calculation can be made using the template outlined.
Limits of applicability of the BCSI method
The BCSI method was primarily designed for self-assessment. If a company decides to start using the method and follow the set-up steps indicated in section 5.2 above, the results and calculations should be comparable over time as long as the method is applied consistently and the nature of the production doesn’t change.
The ‘long term’ data attributes that do not vary per batch (i.e. the social sustainability indicators) should be re-examined once per year or so. The applicability of these examinations and the comparisons over time depend on how thoroughly the indicator values are examined and measured. For instance, when it comes to ‘Professional pride’ and ‘Job satisfaction’ among the employees, the company can decide how much effort they want to put into measuring these values (for instance by having annual performance reviews and getting feedback on these values in that context).
The batch-specific data attributes (including those that are measured per batch, like fuel, and those where the resource use is only assigned per batch, like hull, vessel and gear components) will be the basis for the day-to-day calculations and sustainability measurements. The accuracy of this batch-based estimate of sustainability (especially when it comes to environmental sustainability and emissions) depends on to what degree all relevant resources used have been identified and measured, and whether the contribution to respective emission type for each resource has been established.
Potential Impact:
Project impact
We can distinguish between direct impact (measurable effects directly resulting from use of the project outputs) and indirect impact (wider and more indirect effects that may occur as a result of using the project outputs over time), and we can identify numerous stakeholder groups that may benefit from the project.
The expected impact of the project can be broken into four main categories. They are economic impact for the SMEs in the value chain of cod and haddock, commercial impact of the project in itself, social impact for fishing villages and health impact for EU consumers in general.
Economic impact
The positive and desired economic impact of WhiteFish will depend on:
• The number of companies, and in particular the number of SMEs that the project outcome is relevant for and can be used by
• The price increase that we can manage to get because of better documentation of sustainability
• The volume and value of the fish that gets this price increase
• Who the competitors are (there will be little positive economic benefit for Europe if the increased price or market share for cod/haddock will result in a corresponding decreased price or market share for another European food sector)
If there are many companies in our sector and if the volume of the product they deliver is large then even a small increase in price/value will have significant positive economic impact. Some background data to indicate that this is indeed the case:
EU SME community
The EU fisheries sector employs 126.000 full time equivalents employees’ onboard 75.000 vessels, landing around 5 million tons a year at the value of over 6 billion Euros. Over 70% of total EU catches come from the North East Atlantic, of this 118.000 tons of cod and 45.000 tons of haddock. The EU fish processing sector includes 4.000 enterprises across the EU employing 130.000 persons and generating 4 billion Euros of value added.
A large proportion of companies in the European seafood sector are SMEs. According to Eurostat, which provides statistics on the number of enterprises in the processing and preserving of fish sector, just over 97% of the companies are SMEs. This is the best available data on the EU seafood industry as whole, but similar information on the commercial fishing companies is missing. When looking at individual countries it becomes evident that most of companies in the industry are SMEs, as for example over 95% of seafood companies in the UK, Denmark, Norway and Iceland are SMEs.
WhiteFish production
In 2009 total fish supply from EU landings, aquaculture and import amounted to 15.3 million tons measured at whole fish equivalent, 6.1 million tons from national landings and aquaculture and 9.2 million tons from import. At the same time 2 million tons were exported from the EU, which means that available volume for consumption in the EU was 13.3 million tons (whole fish equivalent).
World production of fish has increased from 20 million tons to 160 million tons in the past sixty years. For the past three decades the increased production has almost entirely come from the aquaculture sector, as wild capture fish production have remained stagnant at around 90 million tons. Aquaculture has now surpassed wild capture fisheries as the main supplier of fish for human consumption, as significant portions of wild capture fisheries are used for animal feed. The production of tilapia and pangasius has for instance grown substantially in the past years, whilst cod and haddock catches have remained stable at best.
Because of competition with species such as tilapia and pangasius, it is vital for suppliers of wild caught species to differentiate their products on market. It is impossible to compete with these fast growing aquaculture WhiteFish species on price, but there are various favourable characteristics of cod and haddock that can be used to gain a competitive advantage. These include stock sustainability, natural origin, catch and processing that is subjected to rigid and well documented regulations and standards, high nutritional value and the fact that according to some pilot studies the total environmental impact of captured fish can be significantly lower than that of farmed fish.
About 80% of the world’s 3.5 million ton tilapia production comes from aquaculture. China is the main producer with 31% of the total production (40% of the aquaculture production), Egypt comes second with 13% and Indonesia, Philippines, Thailand and Uganda are all producing 5-10%. World production of pangasius is around 1.5 million tons and almost all of it comes from Vietnam based aquaculture.
World production of Atlantic cod is close to 800.000 tons and haddock production is in excess of 300.000 tons. Over 90% of the world supply of these species comes from the NE-Atlantic, and a number of EU member countries are contributing significantly to the world production of cod and haddock. These are countries such as the UK, Denmark, Germany, Sweden, Poland, France, Spain and more.
Competitors on the EU WhiteFish market
In 2009 EU processors utilized 2.8 million tons of marine WhiteFish species (whole fish equivalent) of which 2.5 million tons were imported. In addition 908.000 tons of freshwater WhiteFish species were imported, raising total WhiteFish import reliance to over 92%. Looking at individual WhiteFish species utilized in the EU cod represented the greatest volume with little over 900.000 tons (Atlantic and Pacific cod), but pangasius has now reached second place with over 700.000 tons.
Principal supplying nations of WhiteFish into the EU are Vietnam and China, which emphasises the importance of aquaculture species, such as pangasius for the EU seafood market. Leading nations in the catching sector of wild caught cod and haddock, such as Norway and Iceland, are only supplying half of the volume supplied by Vietnam.
Price and price development
Today, cod and haddock are more valuable species than tilapia and pangasius. Average world market price for frozen pangasius fillets are for example around 2.3 €/kg and 2.9 €/kg for tilapia, while frozen cod fillets go for 4.2 €/kg and haddock for 4.0 €/kg. This price difference is very important to maintain the profitability of SMEs in EU, since their income would be much lower if the price of cod and haddock were comparable to pangasius and haddock.
In order to maintain the price difference, European companies need to differentiate from the low cost aquaculture species. WhiteFish and the BCSI methodology enables them to do so.
Environmental issues and marketing of WhiteFish
In the past decade, environmental issues have become more and more important for the seafood industry and its value chain. Consumers and retailers today want to know whether stocks are managed in a sustainable and responsible manner, how much CO2 emissions are related to the products and how far they have travelled.
It is a widespread misconception that environmental impact from aquaculture is negligible. Aquaculture can for example create serious harm with respect to benthic impact, nutrient loading, escapees, chemical inputs, diseases and feeds. Chemical inputs include antifoulants, antibiotics, parasiticides, anaesthetics and disinfectants that can have effect on whole ecosystems. Water used for aquaculture can be unhealthy and consumers as well as workers in the aquaculture farms can be subjected to toxic substances caused by the aquaculture or by the water used for the cultivation. In addition, most of the WhiteFish aquaculture that is destined for the EU market comes from Asia and has therefore a relatively high carbon footprint/foodmile. Pangasius and tilapia producers in Asia and Africa have in addition been accused of using underpaid workforce or even child labour and forced labour in their farms and processing plants.
The above indicates that there could be opportunities for links in the value chain of NE-Atlantic cod and haddock to emphasise all aspects of sustainability of wild captured fish compared to tilapia and pangasius aquaculture production. WWF in Sweden has for example advised consumers to stay away from pangasius and tilapia (status red), while they encourage consumers to buy cod and haddock from healthy NE-Atlantic stocks (status green and yellow).
Economic impact of the presence of EI/SI calculations
If the BCSI is widely adopted, it may have the future effect that many SMEs in Europe will attach sustainability and environmental information to their fish. This will serve as a benchmark for “good practices” and might as such serve to strengthen the competitive position of EU SMEs even further, especially when negotiating access and price with retailer chains that are under consumer pressure for environmentally responsible behaviour. It is also worth noting that while the “automated” part of the BCSI calculations are particular to the captured fish industry (because of the legally required extensive data recordings they must make), the “differentiated” part of the BCSI is transferable also to other foodstuffs and even other product types. BCSI will set the standard for how to perform batch-based calculations of SI, and a lot of the knowledge and principles established in BCSI can be transferred to -, and have a positive impact on other food or product sectors.
Economic impact calculation
If wild caught cod and haddock is to be categorised as “just another WhiteFish species”, prices are likely to gradually reduce and approach prices paid for other WhiteFish species or even other protein sources, such as poultry and pork. Currently prices for frozen cod and haddock fillets exceed prices for frozen pangasius and tilapia by about 30%. Under the assumption that all catch of NE-Atlantic cod and haddock would be used to produce frozen fillets and that future prices will be 30% lower than they are today, the total cost of producing “just another WhiteFish” would be over 500 million Euros a year.
Seafood is not only competing against other seafood, but also other goods, such as poultry and pork. In the past five years, price of seafood has risen compared to poultry and pork. Both pork and poultry are farmed products, so the supply of those goods can be increased or decreased based on consumer demands. Comparing the price indices of seafood, pork and poultry may therefore reveal potential development in price of seafood, if no differentiation is achieved between farmed and wild caught production. By using this argument it can be predicted that EU WhiteFish producers will be faced with 15%-30% lower prices in the future, with total cost between 250-500M Euros for cod and haddock producers.
However, given the fact that today, consumers are more environmentally aware than in the past, there are obvious opportunities for differentiation in the market by comparing real environmental loads, similar to the comparing of values on packaging. The BCSI may allow producers of wild caught NE-Atlantic cod and haddock to sell their products with a premium (or at least to retain some of the premium that they have today), similar to those typically seen in production of organically grown products. There is a considerable price difference between organic and non-organic products, and even though this price difference will not be fully obtainable only with BCSI, a successful implementation of BCSI might create 5-10% higher price for the SMEs that use the methodology and as a result get preferential treatment from their customers (this number is based on feedback from the current users).
Social and health impact
European SMEs within the value chain of WhiteFish production provide important jobs and help to balance demographical distribution in Europe by employing socio economic groups that may lack other job opportunities, for instance due to location in rural areas. The nutritional value of cod and haddock is also superior to that of pangasius and tilapia, which can contribute to various health issues within the EU.
Capture and processing of cod and haddock is of great importance for rural development in dispersed settlements inside the EU and affiliated countries. Small fishing villages in Norway, Iceland and the UK are for example heavily dependent on these species and might therefore not survive if competition from imported farmed tilapia and pangasius increases. There is therefore a danger of some demographical changes taking place if measures are not taken to differentiate between wild caught cod/haddock and farmed pangasius and tilapia. The European Fisheries Fund has listed sustainable development of fisheries areas as a priority and has allocated 13% of its budget to funding projects in that area. Protecting jobs in rural areas, where sustainable utilisation of resources is at the forefront, is a task that falls under that priority category.
If nothing is done to lessen the imminent increase of consumption of tilapia at the expense of cod and haddock, it could have considerable effect on public health. Tilapia contains considerably less omega 3 which has proven to have strong beneficial effects on cardiovascular risk factors. Research shows that tilapia has fatty acid characteristics that are generally accepted to be inflammatory by the health care community.
The financial burden for EU health care systems related to cardiovascular diseases has been estimated to be just under €110 billion (2006), which was around 10% of the total health care expenditure across the EU. Moreover, cardiovascular diseases are also one of the leading causes of long term sickness and loss to the labour market. It is therefore of great benefit to encourage consumption of cod and haddock amongst European consumers, as a mean of preventing cardiovascular diseases, resulting in lower cost in the health care system.
List of Websites:
http://www.whitefishproject.org/
The European whitefish catch and processing industry is dominated by SMEs, and it is currently facing several challenges. Worldwide many stocks have collapsed, and environmental organizations warn against consuming captured whitefish. Strict regulations with respect to documentation and traceability have been imposed on the European captured fish industry in the last few years, and fulfilling these generates significant additional cost. While some cod/haddock stocks, particularly in the north-east Atlantic, are still healthy and sustainable there is a an additional problem for these species when they get to the market due to competition from other cheap, but not necessarily sustainable or nutritious, captured or farmed whitefish species. The goal of the WhiteFish project was to strengthen the competitiveness of the European cod/haddock industry by enabling the documentation of the desirable characteristics of whitefish caught in the north-east Atlantic, in particular relating to sustainability (stock, environmental, economic and social).
In the WhiteFish project, extensive sustainability assessments were carried out in 4 different cod/haddock chains, encompassing environmental (LCA-based), social and economic sustainability. Based on these assessments, a simplified model for Batch-based Calculation of Sustainability Impact (BCSI) was developed where, by recording only a few additional data elements, companies could get a day-by-day picture of the sustainability of each batch they are producing. This enables differentiated calculation of sustainability impact, so that products that look identical may be shown to have different properties, for instance related to CO2 emissions, profitability or working conditions. It also enables sustainability assessments to be integrated into business decisions, as managers will know that making less sustainable decisions (for instance related to where to catch, or who to buy from, or what to buy) will show up in the “sustainability account”. It is worth emphasizing that the BCSI method and the simplified and batch-based sustainability assessments is designed mainly for industry (particularly SME) self-assessment over time, but some early adopters have already found that it can be a useful and valuable tool when communicating with (potential) customers, to highlight what the company is doing in relation to sustainability. At the end of the project and after an open hearing period, the data recording recommendations in the BCSI, and the simplified sustainability assessment method was formulated as a low-level voluntary industry standard (a CEN Workshop Agreement) which will live on and be used after the project has finished.
Project Context and Objectives:
Background and problem
Cod and haddock products originating in the North East Atlantic and processed in Europe come from sustainable stocks, are healthy to eat, and preliminary studies show that they are associated with comparatively low negative environmental impact. In an ideal world this would give these products a competitive advantage and higher price in the market, but currently this is not the case. There are various reasons for this:
• Competition from cod and haddock products originating from non-sustainable stocks elsewhere in the world
• Competition from exported cod and haddock products processed cheaply in Asia and imported back to Europe
• Competition from products from farmed whitefish (mostly pangasius and tilapia which are far less healthy species to eat) imported to Europe
• Pressure from environmental organizations not to eat cod or haddock, as most cod or haddock stocks in the world (with practically the only exception being the North East Atlantic stocks) are deemed vulnerable or threatened, and catch on these stocks is deemed unsustainable
• New strict and costly EU / EEA regulations on how to document the catching process and how to document the origin of the fish imposed on the industry
• Lack of differentiation in the market, so that the desirable characteristics of these products relating to the sustainability of the stock, the low associated environmental impact, the high nutritional value and the guaranteed transparency and legality of the catch is in practice almost ignored by the retailer and consumer
The final problem on the list above, the lack of differentiation in the market, is the most serious, and it is the only problem that the industry can attempt to overcome. It is and should be legal and acceptable to import products from cod, haddock or other species to Europe; it is not unnatural for the environmental organizations to focus on species rather than stocks, and the EU legislation is necessary to document that the catch originates from a sustainable stock and is legally caught and landed. If the European North East Atlantic cod / haddock industry is to survive and thrive, it needs to profile the desirable characteristics of their products in a way that is relevant and understandable to the consumer.
Solution
The solution to this problem lies in the increasing environmental awareness of many retailers and consumers, especially related to the potential for climate change. While by no means all consumers care about this issue enough to let it influence their buying decisions, the clear trend is that more and more do, which is why major retailers like Wal-Mart has committed to so called ‘green strategies’ which entail calculating and displaying the environmental impact (EI) of a significant range of their products. EI might be indicated by the distance the food is transported from the time of its production until it reaches the consumer, so called ‘food miles’. This is a number and a concept that is fairly easy to understand, but it can be very misleading as distance travelled does not automatically translate to actual EI. Slightly more advanced and accurate is the calculation and display of associated CO2 emissions. While this is a better indicator of EI, it fails to take into consideration other issues, like acidification, ozone depletion, eutrophication and use of non-renewable resources. Life Cycle Assessment (LCA) takes all these and many other factors into consideration when estimating impact. It is a technique designed to assess impact associated with all the stages of a process, from raw materials through materials processing, manufacture, distribution, use, repair and maintenance, and disposal or recycling. With LCA it is only possible to calculate the impact on the environment, but the impact on sustainability in general, taking into consideration social and economic aspects should also be incorporated. This is done by including economic and social aspects of sustainability into account as well. The generic term for what is calculated by using LCA, economic and social assessment is known as Sustainability Impact (SI) and one option for the cod/haddock industry would be to undertake EI/SI calculations on a large scale and use the results to profile the desirable properties of their products. Unfortunately, to use current methods to document EI/SI suffer from a number of disadvantages:
• The calculation of EI/SI is performed by external experts, and it is costly and time-consuming.
• The calculation of EI/SI is a once-off exercise that gives you a snapshot of the current situation; it is not something you do as part of your everyday business processes.
• Using LCA or simpler methods for environmental impact will get you average numbers for a product or a process only. If you calculate food miles or CO2 emissions for your products using the current methods, you will get one average number to put on all your products, regardless of where the product in question actually came from and regardless of what supply chain it actually went through.
What the cod/haddock industry really wants is a method for calculating EI/SI without these disadvantages; a method that they can use internally, frequently and cheaply, one that give them actual numbers for EI/SI and not just a product type average, and ideally a method where the data acquisition and calculation is close to automated, using the numerous recordings that they already have in their legally required traceability systems as basis.
The title of this project was “Automated and differentiated calculation of sustainability for cod and haddock products” or WhiteFish for short, and the project goal was to develop and validate such a method, for future use in particular in the SMEs in the cod/haddock supply chain so that they can document the sustainability of their products and processes, gain a competitive advantage through improved market access, price and consumer preference, and thrive as an industry.
Project objectives
The overall WhiteFish objective was to strengthen the competiveness of the European cod and haddock industry by documenting and disseminating the relevant and desirable characteristics the products have, in particular in relation to sustainability, environmental impact and transparency.
The specific WhiteFish objectives are as follows:
• To develop a method called “Batch-based Calculation of Sustainability Impact” (BCSI) which is based on the data already recorded by the industry, which can be used by the industry itself, and which enable specific EI/SI calculations on individual product batches.
• To test and validate the BCSI method in three different cod/haddock supply chains. To train the SMEs in those chains to use the method thus ensuring that it is suitable for the intended target group.
• To produce guidelines for SMEs on how to calculate sustainability impact in the captured fish industry using the BCSI method.
• To produce recommendations for SMEs with respect to what data related to sustainability they should record regularly to automate the EI/SI calculation process.
• To publish the details of the BCSI method as a low level European standard (a CEN Workshop Agreement or CWA) to ensure transparency, impartiality and widespread uptake.
All these objectives were achieved within the project, the method and the recommendations have been tested, validated and subjected to an open hearing, and has been published as a low-level European voluntary industry standard (CWA)
Project Results:
Notable S/T results
The main S/T product in the project is the methodology for Batch-based Calculation of Sustainability Impact (BCSI), enabling calculation or enumeration of day-by-day estimates of environmental, economic and social sustainability associated with catch and processing of cod and haddock products. The BCSI methodology was used to estimate environmental impact in the 4 case study chains, and it is the core of the BCSI that constitutes the recommendations in the CEN Workshop Agreement (CWA) “Batch-based Calculation of Sustainability Impact for Captured Fish Products” that was one of the main outcomes of the project. A CWA is a low-level voluntary industry standard, and publishing the BCSI methodology as a CWA ensures that it will live on and be accessible also after the project has finished.
Below some background and details about the development and the content of the BCSI:
Background for BCSI development
The basis for the final version of the BCSI was:
• D1.2 – At the beginning of the project the SME-AGs and SMEs had indicated the properties they wanted the BCSI to have (‘simple to use’ being the foremost of these)
• D3.2 – Extensive data collection was carried out in all pilot cases, based on a lot of potential indicators for documenting sustainability
• D4.2 – Extensive sustainability impact assessment was carried out in all pilot chains, based on all the data collected
• D2.3 – Based on all the data available and on the analysis of how much each indicator contributed to the respective sustainability impacts, the scientists made a recommendation to the SME-AGs and the SMEs on what data it might be desirable to include in the final version of the BCSI and in the European standard
Going from BCSI III to final version of the BCSI and the CWA
After the scientists’ recommendations in BCSI III were finalised there was significant consultancy with -, and feedback from the industry, both outside of -, and within the project. Roughly, the process went as follows:
1. The BCSI III recommendations were finalised and sent to the industry and organization representatives in WhiteFish
2. Mail exchanges, written questions and feedback within the project, draft of a document outlining what was accepted by the industry, and what needed to be discussed further
3. Local meetings between the respective research institutes and the industry and organization representatives, making suggestions and raising questions and issues
4. More mail exchanges, updating the draft of what industry accepted
5. Telephone meeting within the project with extensive point for point discussion of the recommendations and the industry views on each
6. CWA kick-off meeting in June 2014, also open for other participants
7. Draft first version of the CWA produced based on the internal industry recommendations in WhiteFish and on the discussions at the kick-off meeting
8. Wide circulation and presentation of the CWA draft also outside the project
9. Feedback on the content of the CWA, updating the recommendations
10. CWA consensus meeting in November 2014, also open for other participants
11. Some editorial changes suggested and accepted, but overwhelming consensus supporting the applicability and relevance of the standard; practically all industry representatives at the consensus meeting signed off on the standard
As the WhiteFish project ends, the WhiteFish CWA is in its final form. There is, however, a ‘waiting period’ while CEN (who will become the custodians of the CWA after the WhiteFish project finishes) checks for consistency and potential conflict with other standards (which in our case is extremely unlikely), and this means that at the time of writing we’re still waiting for CEN to finalize the process, to assign a number to the CWA, and to start distributing the standard.
The difference between BCSI III and the final version / the CWA
BCSI III, as documented in D2.3 represented the scientist’s recommendations to the industry on what data should be recorded. The final version of the BCSI represents the industry’s considered selection from the scientists’ recommendations. At the end there was a large degree of overlap between what the scientists recommended and what the industry selected to include in the final model, but this overlap was not complete.
Environmental sustainability – Scientists recommended:
The traditional impact categories were ranked with climate change in first place, followed by acidification, particulate matter, ozone depletion, ionizing radiation and human toxicity
Environmental sustainability – Industry chose for BCSI / CWA:
Focus on climate change (‘shall’ element in the CWA), the other impact categories recommended (‘should’ element in the CWA)
Biological sustainability – Scientists recommended:
Stock sustainability: based on ICES reports, IUCN, or any other type of stock management report
Biological sustainability – Industry chose for BCSI / CWA:
‘Fishery descriptive status’ as mandatory element with ICES report as an example, ‘Fishery quantitative status’ as recommended element
Economic sustainability – Scientists recommended:
Profitability and production risk
Economic sustainability – Industry chose for BCSI / CWA:
‘Profit per batch’ mandatory, ‘Labor used per batch’ optional, production risk calculated as coefficient of variation
Social sustainability – Scientists recommended:
In order of importance, to record and pay attention to data on:
Freedom of association, Timely payment of salaries, Pension fund contribution, Worker safety, Professional pride, Job satisfaction, Healthy working environment, Salary level
Social sustainability – Industry chose for BCSI / CWA:
Mandatory: Freedom of association, Timely payment of salaries, Worker safety
Recommended: Pension fund contribution, Professional pride, Job satisfaction, Healthy working environment, Salary level
Most of the recommendations made were in one form or another accepted by the industry and incorporated into the final version of the BCSI and the CWA. The most controversial issue somewhat surprisingly turned out to be biological sustainability, and how to document it. This was surprising because biological sustainability was not the main focus of the WhiteFish project; the project description clearly says “In the WHITEFISH project we will not advance beyond the state-of-the-art when it comes to calculations of stock sustainability. In the BCSI calculations the fact that the stock is sustainable, and that catch on the stock is in accordance with ICES recommendations is an important and explicit checkpoint, but we do not make calculations related to stock sustainability in itself.”. Still, it turned out that both scientists and industry representatives had strong and somewhat conflicting views on the validity and relevance of various external evaluations of stock sustainability (including ICES, and in particular the IUCN red-list), so this (in the context of WhiteFish) tiny issue was probably debated more than all the other recommendations put together.
User guide for the final version of the BCSI
The final version of the BCSI is a set of requirements and recommendations for what data to record in the captured fish industry in order to document environmental, economic and social sustainability. When it comes to environmental sustainability the final version of the BCSI also contains methodology describing how calculations can be made based on the recorded data so that an estimate of emissions can be produced on single batch level. The final version of the BCSI has been formulated as a voluntary European industry standard; the WhiteFish CWA documented in D2.5. For details about exactly what the data recording requirements are, see D2.5.
The following sections contain some background material for users of the standard; it is meant to explain what the standard / the BCSI method is for, who the expected users are, and what using the standard / the BCSI entails. Some of this background material is also included in the standard itself to make the document self-sustainable.
Who is the BCSI for?
If you are a fisherman, a fishing vessel owner or a processor and you want to know about sustainability on batch level, this method will tell you what data you should record, and how that data should be interpreted. It is worth pointing out that the methodology outlined is mainly intended for self-assessment and for monitoring own sustainability over time.
The potential users of this method may include:
• fishermen, fishing vessel owners and other suppliers of wild caught fish
• processors, transporters and buyers of wild caught fish, e.g. wholesalers or supermarket chains
• research institutes with focus on sustainability and related research
• Non-Governmental Organizations (NGOs) with interest in the wild-caught fish industry
• certification organisations with interest in the wild-caught fish industry
What do you need to do before using the BCSI method?
When it comes to data recording and subsequent qualitative self-assessment related to economic and social sustainability the BCSI should be fairly self-contained and ready to use by the industry. When it comes to data recording and subsequent quantitative self-assessment of environmental sustainability most companies are likely to need some help, at least initially. In two areas related to environmental sustainability in particular it is likely that some help is needed:
1. For the adopters of this method it is mandatory to record data about activities, processes and resource use that have significant impact on climate change, and it is recommended to record data about activities, processes and resource use that contribute significantly to other impact categories, but not to climate change. For climate change the impact is measured in kg CO2 equivalents or kg CO2e. To be able to make this calculation, the company needs to know the kg CO2e contribution for each kg of fuel and lubricant they use, for each resource they use when producing, for each transport type they use, and so on. The contribution to other impact categories is measured in different units, and the multiplying factors associated with fuel and lubricant type, resource use and transport type for the other impact categories must also be established if the company wishes to calculate environmental impact in these categories. To get a good estimate of these multiplying factors, the company should contact an industry organization in their field, or scientists or consultants who work with sustainability impact assessment and who has knowledge of the details of fisheries and seafood production in the given company, region and country.
2. Similarly, if this method is to be used to calculate sustainability impact relating to production, the company should also ask an industry organization, consultants or scientists to advise them on which resource types that it is necessary to record usage data on (and what the contribution to environmental impact is, per kg or amount of that resource type). This method does not refer to an exhaustive list of all possible resources used in the production of seafood products; the company aided by experts must decide on which ones are relevant, given the impact categories they wish to calculate contribution to.
How to measure and quantify environmental sustainability
There are many ways environmental impact can be measured and quantified. In this method the following impact categories for environmental impact have been chosen:
• Impact on climate change, measured in kg CO2 equivalents (per kg fish product)
• Impact on ozone depletion, measured in kg CFC-11 equivalents (per kg fish product)
• Impact on particulate matter, measured in kg PM2,5 equivalents (per kg fish product)
• Impact on ionizing radiation, measured in kg U235 equivalents (per kg fish product)
• Impact on acidification, measured in kg molc H+ equivalents (per kg fish product)
• Impact on human toxicity – cancer, measured in kg CTUh (per kg fish product)
Use of various resources contributes in different degrees to the respective environmental impact categories. Use of some resources may have significant impact in one category, but have negligible impact in another category. For the users of this method it is mandatory to calculate the impact on climate change and to record use of those resources that significantly contribute to it. It is recommended to calculate the impact in the other categories and to record use of those resources that significantly contribute to these categories. The users of this method can choose which impact categories in addition to climate change they want to keep track of their contribution to; see below.
Relationship between LCA and BCSI
Life Cycle Assessment (LCA) is a generally accepted method to determine the environmental impact of a product by listing all resources used over the entire life cycle and assigning related emissions and impacts to the appropriate environmental impact categories. While LCA was used in various pilot cases to establish the principles and recommendations underlying this method, this method is in no way a replacement or substitute for LCA. LCA is well defined and can be used to compare any chains and products; the BCSI method is less accurate (and far simpler), and is designed for self-assessment in the wild-caught fish chain only. When using LCA decisions have to be made about what functional unit to use (what unit to assign the environmental impact to), what the system boundaries are, and what principle to use when allocating environmental impact to a process with multiple outputs. Using BCSI these decisions have already been made; the functional unit is 1kg fish product in a given batch, the boundaries only include the links and data elements indicated, and allocation of environmental impact to a process with multiple outputs is based on respective weight (mass allocation).
Calculation of economic impact
Indicators for economic sustainability related to the fishing and processing operation may include profit, net weight per species, fuel amount used when fishing and labour input. No additional calculations are required for these indicators, but they do require interpretation. Interpretation of indicator values per batch is relatively straightforward: profit and net weight per species should be as high as possible, whereas fuel amount used and labour input should be as low as possible.
Indicator values for economic sustainability can also be examined over time, which provides insight into variability and sources of variability. Such variability can either be visualized through graphs or calculated by calculating coefficient of variation for each of these indicators. By expressing these factors as coefficients of variation, companies can identify the main source of variability, and reducing this variability will reduce production risk.
Indicator values for economic sustainability can be interpreted in relation to indicator values for other pillars of sustainability. Given that indicators for environmental sustainability are recorded per batch, economic indicator values can be interpreted in relation to environmental indicator values. If a company has recorded a batch with low profit in comparison to other batches, but also with low emissions of CO2e in comparison to other batches, this may not be a particularly sustainable batch for this company since the batch did not have a sufficiently positive impact on profitability.
Calculation of social impact
Data recording requirements for social impacts of companies are related to 8 specific indicators listed in the final version of the BCSI and the CWA. For details on how the data may be interpreted, see the respective indicators in D2.5.
Calculation of environmental impact in general
The following constitutes a rough step by step guide to calculating environmental impact using the BCSI:
1. Select which environmental impact categories in addition to climate change you want to keep track of your contribution to, if any.
2. Select which links in the supply chain you want to record data about resource use in. Note that if there are links earlier in the chain that you do not cover, you need to establish a way of getting access to the data on the environmental impact generated there. One way of doing that is to encourage your suppliers to use BCSI, and to pass the calculated respective impacts on to you.
3. For processes where there is waste or by-products, establish what fraction or percentage of the “received” impact should be assigned to the main output of the process (mass allocation).
4. Select which resource uses you need to keep track of in the respective links. Some resource types (like fuel use during the fishing operation) are specified as part of the BCSI; some resource types are relevant only if they contribute to at least one of the impact categories you have chosen.
5. For each resource, establish what the contribution is from 1 unit of that resource to the respective impact categories you have decided to track your contribution to.
6. For each resource not directly connected to the batch (for instance use of electricity, gear materials or hull materials) establish how to assign use of this resource to a particular batch.
7. Start recording resource use and calculate environmental impact per batch
8. Produce reports and statistics, look for trends and improvement potential when it comes to environmental impact per batch in your company
For many of these points, it may be beneficial to do an initial consultation with experts to advice on the selections and to configure the calculations. After this initial consultation, if there are no major changes in production or type of resource used, each company should be able to record data and perform the calculations without any outside assistance.
Calculation of environmental impact in relation to climate change
For each relevant resource type the factors that indicate how big the contribution to climate change for 1 kg of the given resource must be established. The emissions of other gases than CO2 are converted into CO2 equivalents based on how big a contribution they have to climate change compared to CO2 emissions, and this measurement is denoted CO2e. This means that contribution of the use of a resource to climate change is measured in kg CO2e per resource unit, and we multiply this factor by the amount used to get the total kg CO2e for the whole batch. Kg CO2e per kg fish product is obtained by dividing this number by the batch net weight.
For details of how the calculation of environmental impact is carried out, see the CWA or WhiteFish deliverable D2.4.
After catch follows some sequence of processing and transport, and there may be many processing links with or without transport in between. The key principle when calculating total impact further down the chain is to establish the total kg CO2e associated with the input(s) to this process , and also to establish what fraction of these “received” CO2e emissions should be associated with this process, see also below). If you have access to all data regarding production and resource use from all links in the supply chain up to and including your own link these numbers can be calculated link by link. If you do not have access to all these data from the previous links you depend on receiving these numbers from your suppliers.
The percentage / fraction (C) depends on yield and waste. In simplified terms the outputs of a process can be classified as “main product” (indicated in (A)), “by-products” (which we do not calculate the impact for here, but which still get assigned their share of the impact “received”) and “waste” (which do not get assigned their share of the impact “received”). “yield” is net weight of the production batch (A) divided by the total weight of the catch used to produce this production batch.
A simple estimate of (C) can be obtained by calculating “yield” divided by (1-“waste”) so that for instance a yield of 60% will give:
• For waste = 0% (no waste): C = 60% / 1 = 60%
• For waste = 10% (some waste): C = 60 % / 0,9 = 66,67%
• For waste = 40% (all other received material go to waste): C = 60% / 0,6 = 100%
Note that the amount of resource used is for this one batch only, so that means that if there are any relevant resources used that are not directly connected to the batch, the resource use and corresponding kg CO2e emissions must be allocated to this batch as indicated in 5.3.3 above.
Calculation of environmental impact in other impact categories
Exactly the same principle applies as indicated above. For each resource used the contribution to the respective impact category type per unit resource must be established,, and then the calculation can be made using the template outlined.
Limits of applicability of the BCSI method
The BCSI method was primarily designed for self-assessment. If a company decides to start using the method and follow the set-up steps indicated in section 5.2 above, the results and calculations should be comparable over time as long as the method is applied consistently and the nature of the production doesn’t change.
The ‘long term’ data attributes that do not vary per batch (i.e. the social sustainability indicators) should be re-examined once per year or so. The applicability of these examinations and the comparisons over time depend on how thoroughly the indicator values are examined and measured. For instance, when it comes to ‘Professional pride’ and ‘Job satisfaction’ among the employees, the company can decide how much effort they want to put into measuring these values (for instance by having annual performance reviews and getting feedback on these values in that context).
The batch-specific data attributes (including those that are measured per batch, like fuel, and those where the resource use is only assigned per batch, like hull, vessel and gear components) will be the basis for the day-to-day calculations and sustainability measurements. The accuracy of this batch-based estimate of sustainability (especially when it comes to environmental sustainability and emissions) depends on to what degree all relevant resources used have been identified and measured, and whether the contribution to respective emission type for each resource has been established.
Potential Impact:
Project impact
We can distinguish between direct impact (measurable effects directly resulting from use of the project outputs) and indirect impact (wider and more indirect effects that may occur as a result of using the project outputs over time), and we can identify numerous stakeholder groups that may benefit from the project.
The expected impact of the project can be broken into four main categories. They are economic impact for the SMEs in the value chain of cod and haddock, commercial impact of the project in itself, social impact for fishing villages and health impact for EU consumers in general.
Economic impact
The positive and desired economic impact of WhiteFish will depend on:
• The number of companies, and in particular the number of SMEs that the project outcome is relevant for and can be used by
• The price increase that we can manage to get because of better documentation of sustainability
• The volume and value of the fish that gets this price increase
• Who the competitors are (there will be little positive economic benefit for Europe if the increased price or market share for cod/haddock will result in a corresponding decreased price or market share for another European food sector)
If there are many companies in our sector and if the volume of the product they deliver is large then even a small increase in price/value will have significant positive economic impact. Some background data to indicate that this is indeed the case:
EU SME community
The EU fisheries sector employs 126.000 full time equivalents employees’ onboard 75.000 vessels, landing around 5 million tons a year at the value of over 6 billion Euros. Over 70% of total EU catches come from the North East Atlantic, of this 118.000 tons of cod and 45.000 tons of haddock. The EU fish processing sector includes 4.000 enterprises across the EU employing 130.000 persons and generating 4 billion Euros of value added.
A large proportion of companies in the European seafood sector are SMEs. According to Eurostat, which provides statistics on the number of enterprises in the processing and preserving of fish sector, just over 97% of the companies are SMEs. This is the best available data on the EU seafood industry as whole, but similar information on the commercial fishing companies is missing. When looking at individual countries it becomes evident that most of companies in the industry are SMEs, as for example over 95% of seafood companies in the UK, Denmark, Norway and Iceland are SMEs.
WhiteFish production
In 2009 total fish supply from EU landings, aquaculture and import amounted to 15.3 million tons measured at whole fish equivalent, 6.1 million tons from national landings and aquaculture and 9.2 million tons from import. At the same time 2 million tons were exported from the EU, which means that available volume for consumption in the EU was 13.3 million tons (whole fish equivalent).
World production of fish has increased from 20 million tons to 160 million tons in the past sixty years. For the past three decades the increased production has almost entirely come from the aquaculture sector, as wild capture fish production have remained stagnant at around 90 million tons. Aquaculture has now surpassed wild capture fisheries as the main supplier of fish for human consumption, as significant portions of wild capture fisheries are used for animal feed. The production of tilapia and pangasius has for instance grown substantially in the past years, whilst cod and haddock catches have remained stable at best.
Because of competition with species such as tilapia and pangasius, it is vital for suppliers of wild caught species to differentiate their products on market. It is impossible to compete with these fast growing aquaculture WhiteFish species on price, but there are various favourable characteristics of cod and haddock that can be used to gain a competitive advantage. These include stock sustainability, natural origin, catch and processing that is subjected to rigid and well documented regulations and standards, high nutritional value and the fact that according to some pilot studies the total environmental impact of captured fish can be significantly lower than that of farmed fish.
About 80% of the world’s 3.5 million ton tilapia production comes from aquaculture. China is the main producer with 31% of the total production (40% of the aquaculture production), Egypt comes second with 13% and Indonesia, Philippines, Thailand and Uganda are all producing 5-10%. World production of pangasius is around 1.5 million tons and almost all of it comes from Vietnam based aquaculture.
World production of Atlantic cod is close to 800.000 tons and haddock production is in excess of 300.000 tons. Over 90% of the world supply of these species comes from the NE-Atlantic, and a number of EU member countries are contributing significantly to the world production of cod and haddock. These are countries such as the UK, Denmark, Germany, Sweden, Poland, France, Spain and more.
Competitors on the EU WhiteFish market
In 2009 EU processors utilized 2.8 million tons of marine WhiteFish species (whole fish equivalent) of which 2.5 million tons were imported. In addition 908.000 tons of freshwater WhiteFish species were imported, raising total WhiteFish import reliance to over 92%. Looking at individual WhiteFish species utilized in the EU cod represented the greatest volume with little over 900.000 tons (Atlantic and Pacific cod), but pangasius has now reached second place with over 700.000 tons.
Principal supplying nations of WhiteFish into the EU are Vietnam and China, which emphasises the importance of aquaculture species, such as pangasius for the EU seafood market. Leading nations in the catching sector of wild caught cod and haddock, such as Norway and Iceland, are only supplying half of the volume supplied by Vietnam.
Price and price development
Today, cod and haddock are more valuable species than tilapia and pangasius. Average world market price for frozen pangasius fillets are for example around 2.3 €/kg and 2.9 €/kg for tilapia, while frozen cod fillets go for 4.2 €/kg and haddock for 4.0 €/kg. This price difference is very important to maintain the profitability of SMEs in EU, since their income would be much lower if the price of cod and haddock were comparable to pangasius and haddock.
In order to maintain the price difference, European companies need to differentiate from the low cost aquaculture species. WhiteFish and the BCSI methodology enables them to do so.
Environmental issues and marketing of WhiteFish
In the past decade, environmental issues have become more and more important for the seafood industry and its value chain. Consumers and retailers today want to know whether stocks are managed in a sustainable and responsible manner, how much CO2 emissions are related to the products and how far they have travelled.
It is a widespread misconception that environmental impact from aquaculture is negligible. Aquaculture can for example create serious harm with respect to benthic impact, nutrient loading, escapees, chemical inputs, diseases and feeds. Chemical inputs include antifoulants, antibiotics, parasiticides, anaesthetics and disinfectants that can have effect on whole ecosystems. Water used for aquaculture can be unhealthy and consumers as well as workers in the aquaculture farms can be subjected to toxic substances caused by the aquaculture or by the water used for the cultivation. In addition, most of the WhiteFish aquaculture that is destined for the EU market comes from Asia and has therefore a relatively high carbon footprint/foodmile. Pangasius and tilapia producers in Asia and Africa have in addition been accused of using underpaid workforce or even child labour and forced labour in their farms and processing plants.
The above indicates that there could be opportunities for links in the value chain of NE-Atlantic cod and haddock to emphasise all aspects of sustainability of wild captured fish compared to tilapia and pangasius aquaculture production. WWF in Sweden has for example advised consumers to stay away from pangasius and tilapia (status red), while they encourage consumers to buy cod and haddock from healthy NE-Atlantic stocks (status green and yellow).
Economic impact of the presence of EI/SI calculations
If the BCSI is widely adopted, it may have the future effect that many SMEs in Europe will attach sustainability and environmental information to their fish. This will serve as a benchmark for “good practices” and might as such serve to strengthen the competitive position of EU SMEs even further, especially when negotiating access and price with retailer chains that are under consumer pressure for environmentally responsible behaviour. It is also worth noting that while the “automated” part of the BCSI calculations are particular to the captured fish industry (because of the legally required extensive data recordings they must make), the “differentiated” part of the BCSI is transferable also to other foodstuffs and even other product types. BCSI will set the standard for how to perform batch-based calculations of SI, and a lot of the knowledge and principles established in BCSI can be transferred to -, and have a positive impact on other food or product sectors.
Economic impact calculation
If wild caught cod and haddock is to be categorised as “just another WhiteFish species”, prices are likely to gradually reduce and approach prices paid for other WhiteFish species or even other protein sources, such as poultry and pork. Currently prices for frozen cod and haddock fillets exceed prices for frozen pangasius and tilapia by about 30%. Under the assumption that all catch of NE-Atlantic cod and haddock would be used to produce frozen fillets and that future prices will be 30% lower than they are today, the total cost of producing “just another WhiteFish” would be over 500 million Euros a year.
Seafood is not only competing against other seafood, but also other goods, such as poultry and pork. In the past five years, price of seafood has risen compared to poultry and pork. Both pork and poultry are farmed products, so the supply of those goods can be increased or decreased based on consumer demands. Comparing the price indices of seafood, pork and poultry may therefore reveal potential development in price of seafood, if no differentiation is achieved between farmed and wild caught production. By using this argument it can be predicted that EU WhiteFish producers will be faced with 15%-30% lower prices in the future, with total cost between 250-500M Euros for cod and haddock producers.
However, given the fact that today, consumers are more environmentally aware than in the past, there are obvious opportunities for differentiation in the market by comparing real environmental loads, similar to the comparing of values on packaging. The BCSI may allow producers of wild caught NE-Atlantic cod and haddock to sell their products with a premium (or at least to retain some of the premium that they have today), similar to those typically seen in production of organically grown products. There is a considerable price difference between organic and non-organic products, and even though this price difference will not be fully obtainable only with BCSI, a successful implementation of BCSI might create 5-10% higher price for the SMEs that use the methodology and as a result get preferential treatment from their customers (this number is based on feedback from the current users).
Social and health impact
European SMEs within the value chain of WhiteFish production provide important jobs and help to balance demographical distribution in Europe by employing socio economic groups that may lack other job opportunities, for instance due to location in rural areas. The nutritional value of cod and haddock is also superior to that of pangasius and tilapia, which can contribute to various health issues within the EU.
Capture and processing of cod and haddock is of great importance for rural development in dispersed settlements inside the EU and affiliated countries. Small fishing villages in Norway, Iceland and the UK are for example heavily dependent on these species and might therefore not survive if competition from imported farmed tilapia and pangasius increases. There is therefore a danger of some demographical changes taking place if measures are not taken to differentiate between wild caught cod/haddock and farmed pangasius and tilapia. The European Fisheries Fund has listed sustainable development of fisheries areas as a priority and has allocated 13% of its budget to funding projects in that area. Protecting jobs in rural areas, where sustainable utilisation of resources is at the forefront, is a task that falls under that priority category.
If nothing is done to lessen the imminent increase of consumption of tilapia at the expense of cod and haddock, it could have considerable effect on public health. Tilapia contains considerably less omega 3 which has proven to have strong beneficial effects on cardiovascular risk factors. Research shows that tilapia has fatty acid characteristics that are generally accepted to be inflammatory by the health care community.
The financial burden for EU health care systems related to cardiovascular diseases has been estimated to be just under €110 billion (2006), which was around 10% of the total health care expenditure across the EU. Moreover, cardiovascular diseases are also one of the leading causes of long term sickness and loss to the labour market. It is therefore of great benefit to encourage consumption of cod and haddock amongst European consumers, as a mean of preventing cardiovascular diseases, resulting in lower cost in the health care system.
List of Websites:
http://www.whitefishproject.org/