NENUPHAR D4.3. Assessment tool and new proposals on economic instruments and financial schemes

This deliverable explains how environmental governance has shifted from rigid regulation toward more flexible policy mixes that combine economic incentives, regulation, and information tools. In agricultural nutrient management, this is especially important because excess nitrogen (N) and phosphorus (P) create serious risks for ecosystems, climate, and human health. Traditional command-and-control policies have proved insufficient, so governments increasingly use economic instruments such as fertilizer taxes, subsidies, tradable permits, and nutrient offset schemes to reduce pollution and encourage innovation. Within the EU, these approaches are framed by the Common Agricultural Policy, environmental directives, and circular economy strategies. However, fragmented governance, complex regulation, and limited financing still slow the uptake of circular nutrient solutions. NENUPHAR project addresses this by analysing the design, governance, implementation, and impacts of economic instruments across different European contexts. The work combines desk research, expert interviews, and reviews of local and regional schemes. It identifies drivers, barriers, financial parameters, and success factors, while also proposing new fiscal and economic incentives suited to public and private actors. The analysis shows that economic tools are most effective when combined with strong regulation, clear information, and early stakeholder involvement. It also stresses the need for accessible financing for small farms and agri-food SMEs. Overall, the project supports tailored policy mixes for sustainable, resilient, and circular nutrient management.