Bid Prospectus

Blue Economy Cooperative Research Centre

Delivering innovation in sustainable seafood and renewable energy production for a marine nation

An initiative of The University of Tasmania

Introduction

Solutions to meet global demand for food and energy

Australia's National Marine Science Plan was developed with the explicit goal of "driving the development of Australia's blue economy". It articulates the prospect of achieving a cross-sectoral collaboration that amounts to a $100 billion annual economic opportunity by 2025. At the same time it seeks to address the grand challenges facing effective management and stewardship of our ocean resources, ultimately enabling us to meet growing global demand for commodities such as food and energy.

Meeting this demand links to Federal Government Growth Centre Priorities in relation to both food and agribusiness, as well as oil, gas and energy resources, and offers the opportunity to position Australia as a frontrunner and a leader in the emerging blue economy.

The Blue Economy CRC is a part of this journey.

The launching point for the Blue Economy CRC is to build on Australia's existing strengths in seafood production, renewable energy and offshore engineering. The integration of these three elements as research priorities is highly strategic and fundamental to the future of the blue economy as they are naturally synergistic and provide the opportunity for businesses in these sectors to share critical support infrastructure and 'problem-solve' together, delivering clear productivity and operational cost benefits based on an 'industrial ecology' approach.

For instance, technical and commercial dependencies naturally exist between aquaculture and energy throughout the farmed seafood value chain, from hatchery and grow-out systems, to harvest, processing and export activities. Access to cheap 'behind the meter', off-grid electricity and/or process heat can provide enormous savings for seafood production. Furthermore, renewable energy brings new opportunities to capitalise on Australia's long established legacy in offshore oil and gas production, by harnessing the power of the ocean to produce the next generation of gaseous or liquified energy products (hydrogen and ammonia) for export to a world market.

To meet future market demand and growth targets, and to do so at considerable scale, requires access to and support of world-class expertise in offshore engineering, in order to establish and maintain safe operations around the clock, in all conditions. This means leveraging the skills, existing assets and experience of this sector to 'problem solve' for a new operational paradigm. This includes maintaining the health and well-being of live animals, effectively treating nutrient discharge on a grand scale, producing and holding fresh water, operating micro-grid infrastructure that connects and balances large-scale electricity supply with demand, and conducting integrated industrial and electro-chemical processes.

While moving offshore offers a substantial increase in available sites and a potential step-change in the scale of production, the cost of offshore operations is much larger. Research and development projects in Europe have demonstrated that sharing costs through innovative and multiple use of offshore platforms can lead to improved economic outcomes for multiple sectors. This CRC builds off the international economic and feasibility studies undertaken by collaborative European programs such as Tropos, Mermaid, MARIBE and H2Ocean to commence Australia’s move to offshore seafood and marine renewable energy production.

In short, the Blue Economy CRC presents an unparalleled opportunity to develop the systems, structures and capabilities we urgently need to ensure that Australia's offshore marine production and renewable energy industries can meet future challenges while maintaining global competitiveness.

Vision

To enhance the development of Australia’s blue economy through the delivery of world-class, industry-focused research into integrated seafood and renewable energy production systems.

Mission

To develop innovative and state-of-the-art offshore seafood and marine renewable energy systems that provide a paradigm shift in the way we use our Oceans for the production of food and energy.

Through integration of the seafood production, marine renewable energy and offshore engineering sectors, the CRC will position Australia as a global leader in the production of economically viable, socially acceptable and environmentally responsible high quality marine products.

To demonstrate the significant economic, employment and environmental benefits of co-locating industry sectors offshore that will drive down the unit costs of production and underpin long term competitiveness from Australia’s greatest natural asset – its Oceans.

Why invest?

1. The challenge

The world is increasingly dependent upon and looking to its oceans to provide both food and energy. For instance, The State of World Fisheries and Aquaculture report issued by the Food and Agriculture Organisation has estimated that around 3 billion people eat seafood as a key source of protein in their daily diet (FAO, 2014), with aquaculture providing a growing proportion of this supply even as wild fish catch has plateaued or is in decline.

Meeting market demand offers up numerous challenges for businesses, including increasing regulation, spiralling energy costs, heightened consumer awareness, pollution control, access to the right expertise and community acceptance, all of which threaten long-term commercial viability.

Offshore engineering challenges include addressing a cyclical and/or permanent downturn in traditional markets, loss of manufacturing and engineering capability and under-utilisation of key infrastructure assets.
Seafood challenges include a limitation on the number of additional near-shore, coastal production sites that will enable expansion, heightened regulatory and community scrutiny, a need to move into a more energetic and exposed operating environments, and ability to access cost-effective energy to support vertically-integrated operations.
Marine renewable energy challenges include relative immaturity or limited deployment of devices, inability to compete commercially in mainstream electricity markets and a lack of demonstration and supported deployment sites in Australia to support innovation.

A new approach is called for.

In scaling both aquaculture and marine renewable energy systems in the open ocean with a view to innovating a new, integrated production paradigm, systems need to be conceived in such a way that can (i) deliver consistent quality and production reliability at competitive cost; (ii) cope with all the operating conditions that the harsh offshore marine environment can deliver, and; (iii) continue to preserve the sensitive ecological environment within which these industries operate in perpetuity, while maintaining a social license to operate.

2. The opportunity

The global blue economy is predicted to reach US$3 trillion by 2030.

Food and energy are key industry sectors in Australia currently attracting significant investment. They are aligned to the Federal Government's Growth Centre Priorities in relation to food and agribusiness and oil, gas and energy, each of which has a contribution to make to position Australia as a global leader in the emerging blue economy. The opportunity for the Blue Economy CRC is ultimately to increase Australia's productivity, competitiveness and GDP, while also creating know-how in sustainable offshore food and energy production for global application that can simultaneously address some of the aforementioned operational challenges.

Australia has ~26,000 km of coastline and boasts the third largest marine economic exclusion zone in the world. Within this we have substantial tropical, sub-tropical and temperate water zones and an abundance of biodiversity in marine flora and fauna. We have demonstrated expertise in the development of cultivation systems for high value seafood species. We boast some of the best ocean energy resources in the world and are an established leader in renewable energy technology and project development. Our offshore engineering capability and maritime services capacity is truly world-class, leveraging off decades of oil and gas, as well as shipping experience.

The University of Tasmania in particular, with its specialist Institutes the Australian Maritime College and the Institute for Marine and Antarctic Studies, is the natural co-ordinator of this Blue Economy CRC effort being a recognised global research leader and strong industry collaborator in all of these areas. AMC is recognised globally as being a Centre of Excellence in the maritime sector. They have a multi-million dollar suite of specialist teaching, learning and research facilities that are internationally acclaimed and utilised by government bodies and maritime-related businesses worldwide. In addition, their professionally-experienced teaching and research staff have strong industry links. IMAS is a Centre of Excellence for marine and Antarctic research that cuts across traditional scientific and social scientific boundaries. They are dedicated to enhancing environmental understanding and facilitating thoughtful and sustainable development of the marine environment for the benefit of Australia and the world.

By capitalising on Australia's reputation for high value marine products, our research and technical expertise, along with our proximity to and trading relations with Asia in particular, domestic industry is well placed to develop distinctive and substantial global advantages in the blue economy domain.

3. What could it look like?

The Blue Economy CRC will test new models, technologies and creative approaches to offshore production by combining forward-thinking industry partners with Australia’s best researchers to deliver innovation in sustainable offshore food and renewable energy systems. Research infrastructure to support the CRC will be a combination of existing and new facilities but one thing is clear - to solve the problems of operating offshore, at some point you need to be offshore and to align with the needs of industry. Concepts being considered include a permanently deployed offshore accommodation and work platform, co-opted from the oil and gas industry towards the end of the CRC, that can be the focus of applied research, field testing and 'real-world' operations.

In the end, the research agenda must be 'co-created' with industry partners to ensure it delivers value and assists all participants to face their challenges in achieving scale and commercial success in the offshore environment. Ultimately, the assembled skills and infrastructure will enable multiple industries and researchers to work together to explore and test innovative ideas from conceptualisation to commercialisation, and will support the increased use of Australia’s maritime territories for productive economic gain. The Blue Economy CRC will gather research capability and enable more effective collaboration with international partners to ensure that Australia is at the cutting edge of emerging developments in the blue economy sector.

4. The value proposition

The Blue Economy CRC will combine motivated industry partners with Australia’s best researchers to deliver innovation in integrated offshore seafood and renewable energy systems that are economically viable, environmentally adapted and socially acceptable. In terms of outcomes it will:

drive down the costs of doing business for all Australian blue economy participants through applied research and innovation, as well as by demonstrating the commercial benefits of co-locating industries and infrastructure.
result in a doubling of Australian marine product exports by 2035 including a tripling of aquaculture production (by value) by 2040, with over 50% derived from offshore systems.
The CRC will provide the mechanism by which collaborating institutions and the different industry sectors can work together to share expertise and drive innovation and outcomes faster, with greater efficacy and efficiency.
evolve Australia's considerable legacy in offshore oil and gas production, including in relation to structures, logistics and engineering, to capitalise on the emerging opportunities for renewable energy-derived liquid and gaseous products.
build confidence in the blue economy for the Australian public and investor community by actively demonstrating the opportunities that offshore systems can bring, including the employment and wealth creation potential this presents for regional communities.
operate on a transparent framework that generates 'social license to operate' and brand loyalty, by engaging with stakeholders and consumers to communicate the benefits and trade-offs associated with offshore developments.
develop a strong post-graduate and post-doctoral community with a culture of industry engagement and innovation.
prepare a trained workforce (through undergraduate, postgraduate and vocational training programmes) that is equipped with the appropriate skills to meet the challenges of these rapidly emerging industries.

Over a ten-year period it will create the new knowledge, technology and future leaders to deliver transformational change, moving seafood and marine renewable energy production from the coastal zone to the open ocean, and demonstrate the scale of potential growth opportunities.

What is a CRC?

The Australian Government’s Cooperative Research Centres (CRC) Programme supports industry-led collaborations between industry, researchers and the community. It’s a proven model for linking researchers with industry to focus on research and development that is geared towards end use and commercialisation. It aims to:

improve the competitiveness, productivity and sustainability of Australian industries, especially where Australia has a competitive strength
deliver outcomes in line with government priorities
encourage and enable small and medium enterprise (SME) participation in collaborative research
foster high quality research to help solve industry specific problems through collaborative research partnerships between industry entities and research organisations.

CRC’s are funded for up to 10 years to catalyse collaboration between industry research and community sectors to develop important new technologies, products and services.

"The oceans contain 97% of the earth’s water and 71% of the earth’s surface is covered by seawater. Approximately 3 billion people live within 200 km of the coast and migration is likely to cause this number to double by 2025. Ocean energy will supply electricity, drinking water, seafood and other products at competitive prices, creating jobs and reducing dependence on fossil fuels."

International Energy Agency - Ocean Energy Systems

Research Priorities

While the following three high level research priorities are integral to the advancement of the blue economy, the specific research topics offered here are for guidance purposes only; we will negotiate with CRC consortium members and partners to align research activities with their industry needs to ensure that commercially-relevant outcomes can be achieved.

Seafood and marine products

Australia has an enviable reputation for producing high quality, low impact seafood. Producing the best seafood from the world’s cleanest seas provides an enormous opportunity to leverage our reputation and expand market share into the world’s fastest growing economies. This priority area will develop, test and evaluate innovative aquaculture production and processing systems for a range of commercial species. Focal areas include:

Integrated production systems that can support multi-species, high quality sustainable seafood production, including artificial reefs, integrated multi-trophic aquaculture (IMTA) and ecological farming techniques.
Integration of renewable energy into the offshore seafood farming and/or processing value chain to minimise the environmental footprint of harvested products.
Development of standardised methods for measuring and monitoring 'blue carbon' through bio-sequestration in macroalgae.
Cultivation of high value species and derivatives that build on our existing reputation for seafood excellence and are geared towards the premium fresh seafood market.
Seafood provenance auditing and ecolabelling that can link the consumer directly to the product and its supply chain.

Renewable energy

Australia is surrounded by ocean, the largest untapped renewable energy source on the planet. Overcoming the technical and scientific challenges in converting the vast energy of the ocean and its surrounding environment into useful products will unlock unprecedented opportunity to expand Australia’s blue economy, by opening it up to world markets. Focal areas include:

Capitalising on Australia’s offshore oil and gas experience to improve design, installation and operation of renewable energy technology in the harsh and often complex marine environment.
A targeted optimisation programme that will drive down the Levelised Cost of Energy (LCOE) for marine renewables to ensure long term competitiveness.
Efficient and deployable renewable energy technologies adapted to the marine environment that can provide renewable electricity, gas and other liquids, including desalinated water, hydrogen and liquid ammonia.
Integrating renewable energy devices into aquaculture and seafood processing operations, such as wave energy converters, that can generate electricity while acting as a damper to protect sea cages, pens and artificial reefs.
Deploying resilient, energy efficient micro-grid solutions for use in the marine environment to support offshore operations.
Establishing an integrated supply chain for the operation and maintenance of marine renewable energy devices and systems.

Offshore engineering

Offshore platforms will become future locations for advancing the blue economy. Emerging multiple and complementary applications range from sea farming to seafood processing, desalination and hydrogen production. Focusing on aquaculture and marine renewable energy, this theme will deliver innovative engineered solutions that facilitate offshore development in the blue economy. Focal areas include:

Developing proof-of-concept designs for new-built fixed or floating offshore platforms and their subsea infrastructure that support the integration of seafood production and offshore renewable energy generation systems.
Appraising and re-rating of existing offshore facilities for re-deployment as integrated aquaculture and renewable energy infrastructure components.
Identifying enabling technology that allows for economically-viable offshore aquaculture projects.
Developing techno-economic models of aquaculture projects including integration with offshore renewable energy generation systems and associated infrastructure.

Cross-cutting Themes

In addition to the three research priorities, there are a range of cross-cutting themes that are also of relevance to the successful development of the blue economy for which we also invite collaboration in the CRC. These are:

Governance, Management and Policy

This cross-cutting research area will focus on developing the governance options for safe, sustainable and appropriate development of offshore platforms and associated industries. Key research topics could include:

Legal requirements for operating in State, Federal and International waters.
Designing appropriate monitoring and evaluation performance metrics for ongoing environmental assessment.
Modelling and certification of blue carbon accounting methods.
Management of biosecurity risks.

Economic Development

This cross-cutting research area will focus on the pathways from experimental, to pilot, to commercialisation of marine products and energy developments. Key research topics could include:

Feasibility and economic modelling of emerging industries and applications.
Development of business models that address the range of interdependencies associated with the different users on the multi-use platform.
Operational liability, insurance and risk research.
Levelised cost of production forecasting and supply chain modelling to identify opportunities for cost reduction and streamlining of product delivery.

Environment and Ecosystems

Emerging industries operating in the public domain such as the oceans require social acceptability and license to operate, despite being out of sight. This cross-cutting research area will focus on implementing food and renewable energy systems that minimise environmental impact, cope with the multi-use management requirements of a future blue economy and meet the expectations of sustainable development and healthy ecosystems. Key research topics could include:

Understanding the life cycle impact of offshore operations on the marine environment and conversely, measuring the effects of the marine environment on these offshore systems.
Assessing the capacity of integrated food and energy production systems to provide ecosystem services that can deliver a 'net gain'.
Consideration of the animal welfare and other ethical advantages, disadvantages or implications of blue economy developments.
Investigating opportunities to improve ecosystem outcomes through measures such as carbon sequestration, nutrient and materials recycling.
Developing public engagement activities and strategies that demonstrate the trade-offs and positive attributes of offshore development, conservation and resource use that can effectively create 'social license to operate'.

Education, Training and Outreach

Accelerating Australia’s shift offshore requires the delivery of targeted education and training, and coordinated programs - vocational, professional degree, and postgraduate research - to support the growing needs and challenges posed by marine and maritime industries, and mobilisation of current workers outside the sector with transferrable skills. Outcomes from this cross-cutting area will include:

Improvement of targeted and accredited research-oriented and vocational training programmes.
Fostering a strong postgraduate and post-doctoral community with a culture of industry engagement and innovation.
Development of a trained workforce that is equipped with the appropriate skills to meet the challenges of this rapidly emerging industry.
A program of community engagement to highlight the benefits and trade-offs associated with offshore development.
Provision of leadership for, and engagement with, global researcher and industry fora at the cutting edge of offshore developments.

New Technologies

Technology is rapidly changing the way systems are managed, products are delivered and services provided. Focus areas of this cross-cutting research area include:

Development of sensors for platform-based offshore operations and supply chain management.
Development of robotic options for mariculture operations, renewable energy maintenance and offshore platform maintenance and operations.
Exploration of artificial intelligence systems for monitoring and maintaining offshore developments.
Adaptation and development of autonomous and remote underwater vehicles for offshore mariculture and renewable energy operations.

Consumer Markets & Product Applications

Seafood is the fastest growing food sector and represents one of the most heavily traded primary production commodities. Australia’s has an enviable reputation for high value quality seafood, hence ensuring that new and emerging cultured seafood products maintain this reputation and are differentiated in the national and international marketplace is core to this CRC. While producing the best seafood from the cleanest seas will underpin Australia’s increased production capability, it will be essential to understand market developments and changing future consumer preferences.

Furthermore, investigations into changing market and consumer trends in relation to energy and chemical commodities is relevant to the CRC also, given the rapid rise of hydrogen transport solutions, power-to-gas and power-to-X (green chemicals) also.

Key research topics could include:

Brand differentiation and protection, including traceability, ecoloabeling and consumer protection
Regulation, policy and compliance to ensure quality control
Value-adding through product development and diversification
Demonstrating provenance including consumer acceptability of production systems
Market forecasting to predict future trends in both the food and energy sectors that will impact on participants in the Blue Economy

AUSTRALIA'S NATURAL ADVANTAGE

1. Australia has sovereign rights over the world’s third largest exclusive economic marine zone.

2. Australia is adjacent to the most populated region in the world – Asia - where over 50% of the world’s population reside.

3. Australia’s key marine seafood exports are reef based (e.g. lobsters and abalone) and highly sought after in Asian markets where they receive some of the highest prices for quality seafood.

4. Australia has a global reputation for quality, safe and sustainable seafood and management of its marine natural resources and biodiversity.

5. Australian research is internationally recognised including fisheries, aquaculture development, and design and systems integration in order to drive innovation in the marine and maritime industries.

6. Australia has proven renewable energy expertise with hydro and wind resources and emerging ocean, geothermal and biomass resources.

7. Southern Australia is located in the world’s best climate for wave energy.

8. Australia is a global leader in the culture of high value reef based invertebrate species including rock lobsters and abalone.

9. Southern Australia is unique in the world due to famously clean and pristine ocean waters.

"The global market is hungry for Australian food. A growing international middle class, already familiar with our values and culture from visiting and studying in our beautiful country, want what we have to offer."

Sector Competitiveness Plan, Food and Agribusiness Growth Centre

Investor Benefits

What's in it for me?

From the outset, we will work with you to ensure that your needs are met through the development of the CRC's research agenda. In becoming an active investor in the Blue Economy CRC, there are a range of benefits that can be expected to accrue for industry, research, government, NGO and community participants alike. These include:

1.Increased commercial innovation, productivity and competitiveness through integration of the marine food production, ocean renewable energy, offshore engineering and auxillary industries.

2. Access to world-class researchers, institutions and facilities through an integrated network of domestic and international industry-research collaborations.

3. Generation of, and access to, new intellectual property to support the growth of Australian marine and manufacturing businesses.

4. Participation in vocational training and educational opportunities for the next generation of industry-focused workers and researchers, thereby helping to maintain competitive advantage and leadership.

5. Ability to leverage funding opportunities on a 1:1 matched basis and drive your innovation agenda further based on co-contribution from the CRC, while building effective partnerships to support ongoing R&D activity and investment.

6. Capacity to offset eligible Research and Development investment for maximum tax benefit, to drive your innovation dollar even further.

Making it happen

How it works

The proposed Blue Economy CRC will be a public-private venture. The CRC’s resources will include cash and in-kind commitments made by the participants. The total value of these commitments will determine the amount of public co-investment provided by government via a CRC grant. The Blue Economy CRC is aiming for an annual contribution of $5m of government funding per annum, for ten years (i.e. the maximum amount available, for the maximum length), to be matched with at least an equivalent amount of cash from participating industry and research organisations, with in-kind contributions additional.

Bidding for a CRC is a highly competitive and resource intensive process. There are two ways to get involved in the CRC; become a core participant or a supporting participant. Flexible investment and tailored participation agreements will be developed to ensure that the CRC’s business model meets the partner’s needs.

A unique opportunity is currently open for those forwarding-thinking organisations who wish to come on board as core participants. These organisations will contribute limited cash and in-kind support to the bid process itself, as well as committing cash and in-kind investment over the term of the CRC as active investors. Core participants have an opportunity to shape the CRC’s business model and direction, including:

Governance and operational structure.
R&D programs, strategy and key milestones.
Legal and fiscal structures.
Intellectual property and commercialisation agreements.
Smaller companies / SMEs may be able to benefit from a single “amalgamated” participant or consortium offer.

Supporting participants commit a smaller amount of funding that may be made on a per-project basis. Flexible terms can be tailored to suit particular business requirements and situations.

Governance

In terms of the governance of the CRC, a Secretariat will provide critical administrative, policy guidance, strategic advice and research infrastructure co-ordination, as required. The Secretariat will operate as a 'lean organisation', streamlining operations using smart technology to offer best practice management and reporting services with a minimum of bureaucracy, while maintaining a sole focus on delivering industry-oriented research outcomes that offer value for money.

The Blue Economy CRC will offer flexible IP and commercialisation agreements. In principle, IP resulting from Blue Economy CRC funded projects will be owned by CRC participants only and beneficially distributed according to the project shares defined in individual Project Agreements. Companies sponsoring a project will retain pre-defined rights in relation to the commercialisation of the IP developed in that project, with the CRC acting as a co-ordinator and arbitrator on IP matters.

The Blue Economy CRC will be an incorporated company limited by guarantee with an independent, skills-based Board of Directors that will provide oversight of the CRC’s direction, activities and performance, as follows:

Core participants will be represented on a Participants Committee and also be eligible for Board positions.
The CRC will retain a small dedicated Secretariat to support operations.
The company will be a ‘for-profit’ company as no net tax is likely to be payable provided all income is expended on research, training and related activities. This will enable direct benefits to flow to participants and can allow flexible IP and licensing arrangements.

Who might be involved?

Already, the Blue Economy CRC bid is attracting interest from a range of cross-sector stakeholders. These include (albeit is not limited to) the following:

Aquaculture & fisheries - farmers, aquafeed, processors, distributors
Renewable Energy - tidal, wave, offshore wind, solar PV, storage, hydrogen, micro-grids, project developers, network providers, gas distributors
Engineering - offshore, marine, naval architects, EPC/O&M contractors, consultants
Research - universities, VET providers, Commonwealth & private research agencies, RTOs
Government & NGOs - local, state and federal primary industry, environmental, planning, export and regulatory agencies, Growth Centres
Industry Bodies - seafood, energy, engineering, sustainable business
Investors - public, institutional, fund managers, private, grant agencies

The typical financial and resource commitment to a CRC inevitably varies based on each individual participants' needs. Notionally, the Blue Economy CRC is open to all who share our vision for the future and that are willing and able to enter into a partnership agreement with us. A tiered participant structure will be negotiated with collaborators both large and small, with options for short, medium and long term engagements over the duration of the ten year CRC program.

Next steps

Timing and process

1.Familiarise yourself with the obligations for CRC participants (pg 8).
2.Please register your interest at www.blueeconomycrc.org.au. We'll get in touch as soon as possible to hear your ideas, answer your questions and to discuss the scope and nature of your potential investment.
3.Once a general 'fit' has been determined, over the coming months we will host a series of workshops, webinars and 1-on-1 conversations to map out the research and commercialisation program in more detail, provide detailed guidance on specific application requirements and to generally seek your input into the development of the bid.

"Australia’s vast oceans are the heritage, heart and economic future of our country. The value of this marine estate to the homes, work, play, energy, food, safety and security of all Australians is matched only by the enormous economic and environmental wealth that this national asset affords us."

National Marine Science Plan 2015-2025 - Driving the development of Australia's blue economy

Key Contacts:

Associate Professor Irene Penesis - Bid Director

Professor Stewart Frusher - Bid Director

Dr Scott Grierson - Bid Engagement Consultant

Email: [email protected]