The burning boat is described by the Maritime and Coastguard Agency as a pleasure boat 26ft in length.
Other vessels in the Aberystwyth area are being asked to stay at least a mile away as a precaution.
A spokesperson said the vessel contains flares, some of which are going off at the scene, and a gas canister.
An area of beach near the burning boat has been sealed off, West Wales Correspondent Kevin Ashford reports.
Police say they are concerned about the possibility of gas canisters on board the boat that could explode.
Milford Haven Coastguard says a man is being treated for smoke inhalation after his boat caught fire near Aberystwyth this morning
A spokesperson said the boat is believed to be from the area.
Two men charged with mislabelling goat meat products have appeared in court in London.
Dafydd Raw-Rees, the owner and food business operator of Farmbox Meats Limited in Aberystwyth and Colin Patterson, the company representative, were at Westminster Magistrates' Court this morning.
They are accused of mislabelling goat meat as with lamb or mutton for the purposes of sale. The pair have been charged with 19 offences relating to the Food Safety Act and one offence of failing to comply with the traceability requirements of meat sold by the company.
It was indicated that both men would plead not guilty to the charges. They were bailed until 28th April.
The Minister for Housing and Regeneration Carl Sargeant has visited Aberystwyth to announce funding which will help coastal areas prepare for the summer tourist season.
Wales was hit by the wettest winter on record between December and February. The money will be spent on repairs to the Wales Coastal path.
The Welsh Government has today announced a further £855,000 to make sure Wales is ready for the tourist season, following the damaging Winter storms in December and January.
Some of the money will be allocated to areas of the Wales Coast Path that were significantly affected by the bad weather.
Aberystwyth will also benefit from a £310,000 boost.
We want to support communities who were hit by the recent bad weather in whatever way we can. We have already announced over £10m for emergency flood repairs, to restore damaged coastal areas and to help affected businesses.
By providing this extra funding for the Wales Coast Path and the regeneration of Aberystwyth we can make sure that people keep coming to Wales to enjoy everything it has to offer.
Funding of £855,000 has been announced today to help make sure Wales is prepared for the tourist season, following the winter storms.
The Wales Coast Path, which welcomes nearly three million visitors every year, will receive £545,000, so that areas of the path that were damaged during the bad weather in December and January can be repaired in time for summer.
This funding will be available to the 17 local authorities that were the worst hit.
Aberystwyth, one of the areas hardest hit by the January storms, will also benefit from a £310,000 allocation to restore the promenade and get the area back to business.
The funding will be used to replace damaged lighting, railings and street furniture like benches, bins and flag poles.
The promenade sea wall will also be repaired and repointed.
Today's announcement takes the total funding to over £10 million to help coastal areas which suffered from the wettest winter on record.
Two men have been charged with mislabelling goat meat products as either lamb or mutton.
Dafydd Raw-Rees, the owner and Food Business Operator of Farmbox Meats Limited in Aberystwyth and Colin Patterson, the company representative, are accused of mislabelling goat meat in order to sell the produce.
The pair have been charged with 19 offences relating to the Food Safety Act and one offence of failing to comply with the traceability requirements of meat sold by the company.
Both individuals will appear before Westminster Magistrates' Court on April 14.
Remedial work to repair Aberystwyth promenade should be completed by Easter, Ceredigion Council says.
A council spokesperson said: "Work has been going on apace to ensure that any necessary work to Aberystwyth promenade and Ceredigion's beaches will be completed by Easter.
"Beaches are being reprofiled where necessary and damaged equipment replaced with over £500,000 being spent on the recovery works to date."
Its extra-long roots make the soil more absorbent, which means more rain could be soaked up on higher ground.Read the full story ›