Will Seaweed Farming Fulfill its Potential as a Climate Change Solution?

Still in its research phase, the 86-acre project is operated by Ocean Rainforest, a company that aims to fight climate change by growing seaweed at scale: 1 million tons a year by 2030. Although an 86-acre terrestrial farm would be considered boutique, the Ocean Rainforest plot, floating in sight of the Channel Islands, represents a significant leap in size from the average U.S. seaweed farm of 1 to 4 acres—and a new frontier for ocean farming.

Supported by $6.2 million in Series A funding, for a total of $22 million from U.S. and European governments, grants, and venture capital, Ocean Rainforest also operates seaweed farms in the Faroe Islands and Iceland that supply the animal-feed, fertilizer, and cosmetic industries. The company’s goal of substantially decarbonizing these industries—with seaweed, instead of petroleum feedstocks, as raw material—depends on the success of this farm. Growing seaweed in the open ocean, with room to exponentially expand, means the Ocean Rainforest team is tackling how to anchor crops in hundreds of feet of water, withstand intense weather, and monitor a farm that lies many miles from shore.

As Ocean Rainforest continues its research, the wider U.S. seaweed industry, still in its infancy, faces significant challenges. Several years of steady investment and scientific breakthroughs have helped it advance, but since 2023, funding has dropped precipitously, and so have retail prices for seaweed-based foods. In the meantime, a lack of government guidance by means of regulation and legislation makes it difficult for farms to gain traction. Seaweed is an extraordinary crop, offering multiple benefits to planetary and human health along with an array of business applications. But it’s fair to say that right now, the industry is having growing pains.

The Investment Slowdown

“We are in what I call the ‘valley of disappointment,’” says Steven Hermans, who founded Phyconomy. American investors have become more sophisticated about startup investments, including in seaweed, he says. A few years ago, he adds, “They didn’t know anything, and they were like, ‘OK, we’ll toss a couple of million into this.’ Then, Everyone kept their money in their pockets during high inflation . . . [and] people realized . . . it will take a long time to build a market for American-grown kelp. Now they’re asking better questions, and that will ultimately lead to better investments.”

But for some companies, that won’t matter. Since Civil Eats began this reporting project nearly a year ago, two of the largest and most well-known American kelp businesses have gone under: Running Tide, a carbon capture company, and AKUA, maker of kelp burgers.

Founded in 2017 by Marty Odlin, the Maine-based Running Tide was one of the most well-funded kelp companies in the U.S. before it shut down abruptly in June 2024. As its website stated, Running Tide aimed to build “humanity’s operating system for the ocean,” drawing down carbon via seaweed-inoculated wood chips. Seaweed naturally absorbs carbon as it grows, but unless it is harvested, it decomposes and releases carbon back. The chips, on the other hand, would sink to the deep ocean to decay, storing the carbon there for thousands of years, according to Odlin. Running Tide’s revenue goal was to sell carbon removal credits to companies interested in decreasing their carbon footprint.

Running Tide garnered $54 million in Series B investments, including from Lowercarbon Capital, in 2022. In June of that year, an article in the MIT Technology Review questioned Running Tide’s farming and business practices. Meanwhile, the company prepared to relocate to Iceland, having persuaded the Icelandic government to approve its wood-chip sinking.

In fall 2023, Running Tide sank 19,000 tons of wood chips into the ocean, selling the world’s first marine Carbon Dioxide Removal (mCDR) credits to Microsoft and Shopify as part of a voluntary carbon market not regulated by government. In less than a year, the company shut down as criticism about its practices continued to swirl; Odlin cited a lack of American government support for the voluntary carbon market as the reason for the closure.

Although $54 million represented a fraction of the $380 million overall investment in the seaweed industry, some think the carbon-sink goal was too narrow, and overlooked all that seaweed could offer. “The long-term [carbon sink] potential attracted a swarm of speculators that took the industry in the wrong direction,” says Bren Smith, founder of GreenWave, a forerunner in the ocean farming movement. GreenWave received roughly $6 million in 2021.

Smith believes that the dip in carbon-fueled funding will encourage the industry to embrace seaweed’s many uses—as a good food for humans and animals, as a game-changing alternative to chemical- and carbon-intensive industries like fertilizers or plastics, and for its proven ecosystem benefits. Also, seaweed doesn’t need arable terrestrial land, likely to diminish as wildfires and extreme weather events like drought increase. “I don’t know if it’s 100 years or five years, but we’re gonna be growing huge amounts of food underwater,” he predicts.

Lack of Federal Funding

“The E.U. has spent . . . . hundreds of millions of euros on R & D related to seaweed, in a way that the U.S. has not. And many startups have benefited from those E.U. projects,” says Tardiff, pointing out that Ocean Rainforest, a for-profit entity, has received extensive E.U. funding. In China and Korea, where seaweed farming first developed into a larger industry, governments provide kelp seed to farmers for free or at a subsidized cost. The lack of state support in the U.S., says Tardiff, also means the American seaweed market is more tied to market fluctuations than its Asian and European competitors.

The paucity of both private and government funding makes it harder for seaweed companies to handle the high cost of farming and processing. “The ocean is uniquely expensive to operate on,” says Tardiff, who also serves as the Lighthouse Lead of 1000 Ocean Startups, a global coalition of incubators, accelerators, competitions, matching platforms, and VCs that have pledged to back at least 1,000 “transformative” startups by 2030.

Basic seaweed farming equipment, like a boat, costs anywhere from $30,000 to $500,000; a single seaweed-line anchor—and a farm needs multiple—can cost $1,000. Also, because kelp is unusually perishable, it requires million-dollar investments in infrastructure equipment, like specialized dehydrators and freezers, to render it shelf-stable. Much of it is custom-built for this new food business.