This report evaluates how and to what extent new regulations and policy instruments have promoted innovation and environmentally sustainable production in one of Norway’s most important industries: salmon farming. It zooms in on a range of rules and innovation-stimulating arrangements, all intended to alleviate the sector’s largest environmental problems, namely escapement and the proliferation of sea lice. The report finds these measures to have had a limited problem-solving effect – along with several, more unintentional consequences. Stricter regulations have reduced the occurrence of sea lice within farms, but do not appear to have lowered the infection pressure on wild fish populations. Moreover, they have caused a hike in mortality rates and welfare problems among the farmed salmon. Escapement has improved significantly over the past decade, but more recently, the trend has reversed. As regards innovation, new policies have triggered a “race” towards more advanced fish-production technologies. However, the design and distribution of subsidies have favored the industry’s biggest players at the expense of smaller-scale farming, and triggered mechanical-type innovations with a questionable potential for commercialization and diffusion. Less effort has been devoted to the potential for genetic innovation. In conclusion, the report calls for a broader set of policy instruments that would, to a larger degree, secure more sustainable area use along the coast, and involve a restructuring of farming localities as well as closer cooperation within the industry.