Brexit, common fisheries policy and discard ban: A financial analysis of the Spanish fleet in the Grand Sole

In the last decades, the Spanish Grand Sole fleet has shown a negative evolution both in the number of vessels and in the turnover of its activity. This trend is mainly due to the institutional framework that determines the governance of the Spanish fleet in Community waters. The distribution of quotas, determined by the Relative Stability System, combined with successive European fishing policies, have caused a reduction in the capacity of the fishing fleet. In addition, more recently, these factors have been compounded by the progressive implementation a of the discard ban, which has been extended to all European species and fishing areas since 2019, and Brexit, which has led to the transfer of 25% of the average value of shared stocks quotas to the United Kingdom from 2021 to 2026. The objective of this article is to analyze whether the Spanish shipowning companies whose vessels operate in Gran Sol, will continue to be profitable or will have to cease their activity. For this purpose, an analysis has been carried out using the Real Options Approach and incorporating an abandonment option. The results show that the value of the abandonment option (49.3%) is high.