The large Icelandic salmon farming company Arnarlax was told yesterday that its licence to farm 10,000 tonnes of sterile salmon in Isafjord has been revoked.

The reason given by the Icelandic Environmental and Natural Resources Board of Appeal was that MAST, the Icelandic Food and Veterinary Authority failed to provide a “comprehensive, weighted assessment of the potential risk of the spread of fish diseases and parasites” before issuing the licences.

The ruling is a big setback for Arnarlax, which is the production division of Icelandic Salmon and which in turn is majority owned by the Norwegian salmon farmer SalMar.

Arnarlax CEO Bjørn Hembre said in a statement yesterday that as a consequence, the licence, which was originally awarded on 14 June this year, has been revoked. The Board of Appeal also addressed the issue of maritime safety.

He added: “This [decision] is unfortunate but will not affect our long term guidance for production of fertile salmon on current licenses. We are now going over the ruling and will work with MAST on the next steps.”

Arnarlax said that according to the ruling, such assessment of potential risk is a necessary precondition for licences in areas where the distance between fish farming sites is less than five kilometres.

The Board of Appeal also addressed maritime safety issues concerning one of the three sites. Arnarlax will work with authorities and MAST on these matters and perform the necessary assessment in order for the licence to be reissued.

The company added: “Icelandic Salmon want to emphasise that no fish farming operations have started in Ísafjarðardjúp and therefore, the ruling will have no effect on current operations or guidance.”