Japanese banks and investors have placed a bold bet on the future of fish farming, but whether this gamble will pay off remains to be seen.
On a 13.7-hectare site in Tsu City, Mie Prefecture, construction is underway on an ambitious aquaculture project. Dubbed the Soul of Japan, the facility aims to produce 10,000 tons of Atlantic salmon annually using land-based recirculating aquaculture systems (RAS).
Backed by 8F Asset Management, a private equity firm specializing in sustainable aquaculture, the project has secured $460 million in funding, including JPY33 billion ($300 million) in debt from a consortium of Japanese banks led by Sumitomo Mitsui Banking Corporation (SMBC).
The project is being touted as a game-changer for Japan’s salmon market, which relies almost entirely on imports. But questions remain about the economics of land-based aquaculture and whether the technology can deliver on its promises.
Japan is one of the world’s largest importers of salmon, a staple in sushi and sashimi. The Soul of Japan facility claims it will address this dependence by producing antibiotic- and vaccine-free salmon domestically, reducing the country’s reliance on imports from Norway and Chile. Its use of RAS technology, which recycles water and limits environmental impact, also aims to appeal to Japan’s growing concern for sustainability.
However, critics argue that land-based farming is far from a silver bullet. While RAS technology eliminates some of the environmental risks of traditional sea-based farms, it introduces others. Chief among them is energy consumption, which can be prohibitively expensive and undermine the facility’s green credentials.
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Banks take the bait
The involvement of Japanese banks in funding such a high-risk venture is striking. Historically conservative in their lending practices, institutions like SMBC appear to have been swayed by the project’s sustainability credentials. The Japan Credit Rating Agency (JCR) awarded the Soul of Japan project its highest sustainability rating, SU1(F), which likely helped to bolster confidence.
Yet land-based aquaculture has a patchy track record. Facilities in Europe and North America have faced high costs, operational setbacks, and biological challenges. The financial backing of Japanese banks may reflect more than just confidence—it could be driven by a government keen to encourage domestic food production and reduce dependence on volatile international supply chains.
While the Soul of Japan project promises to revolutionize Japan’s salmon market, the economics of land-based farming remain daunting. The capital expenditure alone—$460 million for a facility with an annual capacity of just 10,000 tons—raises questions about profitability. Land-based systems also face higher operational costs than sea-based farms, making it unclear how the facility will compete on price with imports.
Supporters point to the potential for vertical integration to offset costs. The project plans to produce pet food from salmon offcuts, adding a secondary revenue stream. Whether this will be enough to ensure long-term viability is far from certain.
A risky experiment?
If successful, the Soul of Japan facility could provide a template for other countries in Asia, where salmon consumption is rising, but local production is limited. For now, however, it remains an experiment—a costly one at that.
The first harvest is not expected until mid-2027, and the challenges facing land-based aquaculture projects globally suggest a long road ahead. Japanese banks and investors have placed a bold bet on the future of fish farming, but whether this gamble will pay off remains to be seen.
