Draft Framework

2 This project has received funding from the European Union’s HORIZON-AG - HORIZON Action Grant Budget-Based research and innovation programme under grant agreement GA 101091268 NOVASOIL INNOVATIVE BUSINESS MODELS FOR SOIL HEALTH Grant agreement ID: 101091268 Draft framework Project NOVASOIL Project title INNOVATIVE BUSINESS MODELS FOR SOIL HEALTH Work Package WP1 Deliverable D1.3 Period covered M6-M18 Publication date 30/04/2024 Dissemination level PU Organisation name of lead beneficiary for this report EVENOR Ref. Ares(2024)5756961 - 09/08/2024 3 This project has received funding from the European Union’s HORIZON-AG - HORIZON Action Grant Budget-Based research and innovation programme under grant agreement GA 101091268 Authors Blanco-Velázquez Francisco José, Gonzalez-Peñaloza Félix, Bravo-García Javier, Alonso-Martín F AnayaRomero María Contributors 4 This project has received funding from the European Union’s HORIZON-AG - HORIZON Action Grant Budget-Based research and innovation programme under grant agreement GA 101091268 QUALITY ASSURANCE PROCEDURES This document has been shared to the consortium in order to ensure their quality and to include a multidisciplinary point of view. Following a description of the different reviews can be found TABLE REVISION HISTORY DELIVERABLE Row Version Date Reviewers Description 1 V1.0 15/04/2024 EVENOR Draft version on shared folder 2 V1.1 22/04/2024 NOVASOIL consortium Comments provided 3 V1.2 23/04/2024 EVENOR Second version circulated by email 4 V1.3 29/04/2024 NOVASOIL consortium Comments on second version 5 V2.0 30/04/2024 EVENOR Final version 5 This project has received funding from the European Union’s HORIZON-AG - HORIZON Action Grant Budget-Based research and innovation programme under grant agreement GA 101091268 Project Consortium Nº Participant organisation name Country 1 EVENOR TECH SLU ES 2 LEIBNIZ-ZENTRUM FUER AGRARLANDSCHAFTSFORSCHUNG GE 3 ZEMNIEKU SAEIMA LV 4 NEW BULGARIAN UNIVERSITY BU 5 CENTRE NATIONAL DE LA RECHERCHE SCIENTIFIQUE CNRS FR 6 KOBENHAVNS UNIVERSITET DK 7 TECHNISCHE UNIVERSITAET MUENCHEN GE 8 ASSEMBLEE DES REGIONS EUROPEENNES FRUITIERES LEGUMIERES ET HORTICOLES FR 9 ISTITUTO DELTA ECOLOGIA APPLICATA SRL IT 10 UNIVERSITA DEGLI STUDI DI FERRARA IT 11 WAGENINGEN UNIVERSITY NL 12 CENTRE OF ESTONIAN RURAL RESEARCH KNOWLEDGE EE 13 UNIVERSIDAD POLITECNICA DE MADRID ES 14 UNIVERSITA DI PISA IT 15 ASOCIACION AGRARIA JOVENES AGRICULTORES DE SEVILLA ES 16 UNIVERSITY OF LEEDS GB 6 This project has received funding from the European Union’s HORIZON-AG - HORIZON Action Grant Budget-Based research and innovation programme under grant agreement GA 101091268 Table of contents 1 Summary 6 2 Introduction 7 2.1 How can this document be used? 9 2.2 Outline the document 10 3 Main sources of information 10 3.1 Case studies 10 3.2 Barriers to implement 16 3.3 Soil management practices 18 3.4 Business model innovation 21 3.5 Incentives 22 4 Business models 24 4.2 Payment preferences 26 4.3 Contract length preferences 32 5 Conclusions 34 6 Acknowledgment 35 7 This project has received funding from the European Union’s HORIZON-AG - HORIZON Action Grant Budget-Based research and innovation programme under grant agreement GA 101091268 1 Summary This document unveils the NOVASOIL project's groundbreaking Draft Framework for soil health business models. It charts the framework's development, acknowledges its contributors, and unveils its mission: to empower stakeholders with a comprehensive guide for navigating crucial decision-making processes. The framework acts as a wellspring of knowledge, drawing upon diverse project elements and real-world case studies. Its ambitious goal? To become the ultimate resource, offering not only successful business models but also a practical design guide and a treasure trove of supporting materials. All this, with a singular focus: promoting soil health and nurturing sustainable agricultural practices. Accordingly, the report explains how business models can be carried out through specific case studies, considering barriers to implement, soil management practices, business model innovation, incentives and payment preferences. Through meticulous analysis of case studies and insightful stakeholder feedback, the framework explores a rich tapestry of business models, pinpoints implementation roadblocks, and measures the impact of sustainable soil management practices. It resoundingly reaffirms the critical role these practices play in maintaining healthy ecosystems. The report issues a clear call for innovative business models to incentivize the improvement of soil health. It delves into the challenges and opportunities associated with implementing these practices, highlighting the crucial role of stakeholders, well-designed incentives, and strategic policy interventions. Ultimately, these elements are the cornerstones for driving broad adoption and fostering a future where agriculture thrives in harmony with the environment. The framework delves deeper, inviting us to explore the interconnected world of soil health, ecosystem services, and sustainable agricultural practices. It sheds light on the various incentive structures and business models that can fuel positive change, such as Agri-Environmental Schemes, Carbon Credit Markets, and Value Chain Payments. Additionally, it emphasizes the importance of a robust legal framework that facilitates compliance and paves the way for success. The analysis meticulously dissects key incentives and the barriers that influence the adoption of soil health business models across diverse countries. Stakeholder preferences overwhelmingly favor financial incentives, marketbased mechanisms, and the removal of legal roadblocks that currently hinder sustainable practices and hinder soil health improvement. Notably, contract length preferences vary based on land-use types, highlighting the need for adaptable structures tailored to specific needs. By fostering a deeper understanding of stakeholder preferences and cultural factors, soil health business models can be optimized for long-term success and impactful change. This paves the way for a future where agriculture 8 This project has received funding from the European Union’s HORIZON-AG - HORIZON Action Grant Budget-Based research and innovation programme under grant agreement GA 101091268 flourishes alongside a healthy environment. Ultimately, the study underscores the critical role of incentives in driving adoption of sustainable land-use practices and highlights the importance of balanced contract structures for achieving optimal soil health outcomes across different land uses. 2 Introduction This document reports on the Draft Framework for the soil health business models developed in the NOVASOIL project. The report illustrates the characteristics and draft contents of the framework, including first solutions to make it usable in a decision-making context and first online implementation. It is the outcome of Task 1.2 of the project, which is described as follows: Task 1.2. Development of a draft framework (M6-M18) Leader: EVENOR. Contributors: ZSA, NBU, TUM, UNIFE, UNIPI, UPM, CNRS This task will focus on building a preliminary version of the framework by: consolidating part a) using insights from WP2 and task 1.1; enriching and developing part b) based on insights and data coming from CS; tentatively developing part c) (a “design guide”) and, d) (documentation, training and supporting material). This draft framework will be used for testing. The framework will be developed in a report format, with a wide use of factsheets and preliminary visual solutions. This document is part of NOVASOIL’s WP1 which focuses on the development of the soil health business framework, including models which are at the core of the project, through a deep involvement of the relevant CoP members (supported by WP5). This WP is organised in such a way as to collect input from the other WPs and to incorporate them step by step into the framework, in a process of coconstructed knowledge accumulation and operationalisation, as can be seen below (Figure 1). 9 This project has received funding from the European Union’s HORIZON-AG - HORIZON Action Grant Budget-Based research and innovation programme under grant agreement GA 101091268 Figure 1: Outline of NOVASOIL Work packages This report was preceded by Deliverable D1.1 which aimed to build a preliminary conceptual framework for the project NOVASOIL. The initial draft defined the soil health business and was the basis for initial coordination among WPs. It was followed by deliverables of WP2 and WP3 wherein empirical evidence on existing initiatives were identified to showcase successful implementation of soil health business models. These successful cases were and are a basis for designing surveys in WP2, WP3 and WP4 about stakeholders needs and preferences, choice experiments, incentives’ preferences and policy innovation lab. Further studies will also continuously feed the framework development with insights from choice experiments and policy innovation labs. It will also contribute to identifying needs and management issues for the implementation of the developed approaches. The final version of the framework will include the following: a) A catalogue showcasing existing successful experiences and good practices in soil health business based on the case studies developed in WP1 and presented in usable forms as examples for practitioners including hits for replication. 10 This project has received funding from the European Union’s HORIZON-AG - HORIZON Action Grant Budget-Based research and innovation programme under grant agreement GA 101091268 b) Improves soil health business suitable to be used as models for future design, including their assessment and the role of different levels of governance and implementation. c) A “design guide” intended as a systematic comprehensive process for the design of soil health business, including the conceptual framework, design variables, determinants at different governance levels in implementation. d) Documentation, training and supporting materials. This document will provide contents for the framework in view of the advances in T2.1, T2.2 and T3.1, while the practical implementation into easily accessible business will be done in WP6 in relation with the project website and WP3 in the Hub. 2.1 How can this document be used? This report born from WP1, 2, 3, and 4, wherein the newly soil health business models were defined through intensive evaluation of EU-wide case studies compiled as factsheets and evaluated based on the acceptance of farmers, landowners and other stakeholders. This document aims to serve as a guide by related actors using the framework in real life decision-making contexts. This will provide a strong evidence basis for showcasing well documented solutions to be disseminated for delivering real life impact and supporting policies. The document can be used in different ways: - To choose among potential new soil health business models as alternatives to or combinations - To design new soil health business models from the preparatory phase up to final implementation. - To consider adding customised prescription - To identify good practices in soil health at a start for developing a business model Some of the impacts that the framework and design guide could have and that have also been proposed in the grant agreement are: 1. increased awareness about the value of investing in soil health and its various co-benefits for land managers, businesses (incl. the financial and insurance sectors), local authorities and civil society This framework represents a review of current knowledge on business models that have a positive impact on soil health and support the identification of research avenues relevant for improving the design and implementation of policies. The document will be a baseline soil health study designed to help farmers, landowners, policy-makers and other stakeholders to evaluate the strengths and challenges of soil health in their agricultural, forestry and urban lands. 2. increased opportunities for investments in soil health across value chains 17 This project has received funding from the European Union’s HORIZON-AG - HORIZON Action Grant Budget-Based research and innovation programme under grant agreement GA 101091268 and only 5 tdmperha for hybrid aspen. Fields are going to be harvested at age 15 years – 2025. This case study is a promising tool for further conversion of degraded soils into areas contributing to economic development, climate and biodiversity goals and soil health. Italy (IT02) Sandy soil - The coastal area of the Emilia-Romagna Region is an area with a strong agricultural vocation, characterized by intensive and high-quality vegetable production. However, the soil health is under significant pressure due to the high percentage of sandy components, salinization, subsidence, loss of organic matter, and contamination. Therefore, the project will explore the possibility of introducing carbon farming to enhance organic matter. Given the widespread presence of sandy soil in the area (involving six municipalities), we will examine the possibility of developing a Sustainability District to create new business models aimed at adding value to soil conservation management with food production through certifications and production standards Collective implement ation 3.2 Barriers to implement Inputs from 1.2 D1.2 “Report on stakeholder co-construction of soil health business cases” presents the findings of a stakeholder questionnaire investigating soil health business models. The emphasis on core elements like value chain analysis, collaborative implementation, PES, and carbon credits aligns with current trends in sustainable agriculture. The focus was on key characteristics including: - Value chain analysis: Examining the flow of benefits and costs throughout the production and consumption system. - Collective implementation: Exploring collaborative approaches among stakeholders within the value chain, payment for Ecosystem Services and/or Carbon credits. - Payment for Ecosystem Services (PES): Evaluating mechanisms for financially rewarding the provision of environmental benefits (e.g., carbon sequestration, water quality improvement). - Carbon credits: Assessing the potential of carbon sequestration in soil as a tradable commodity. The report emphasises both facilitators and inhibitors of implementing these models. The findings on incentives and barriers are particularly noteworthy. The strong stakeholder support for direct PES and carbon credits underscores 18 This project has received funding from the European Union’s HORIZON-AG - HORIZON Action Grant Budget-Based research and innovation programme under grant agreement GA 101091268 their potential to drive adoption. However, the identified knowledge gaps and lack of supportive policies highlight critical areas for intervention. Key findings include: - Incentives: Direct PES and carbon credits were identified as the most significant drivers for soil health business models. - Barriers: Lack of information and supportive policies were the principal obstacles identified by stakeholders. A SWOT analysis reveals strengths (stakeholder expertise, tailored monitoring), weaknesses (long-term commitment, financial constraints), opportunities (market expansion, ecosystem services provision that could be attractive for other businesses), and threats (consumer awareness, market competitiveness). The findings highlight the need for knowledge dissemination, policy interventions, and strategic utilisation of strengths and opportunities to foster the adoption of soil health business models within the agricultural sector. Following, the specific results obtained are cited: Strengths: Stakeholder Expertise: The knowledge and experience of land managers (farmers, forestry professionals) in soil assessment and implementing local practices were highlighted as assets. Tailored Monitoring: The selection of long-term monitoring indicators specific to local conditions was viewed favourably. Sustainability Potential: The ability to enhance soil health and ecosystem services in a sustainable manner was recognized as a positive attribute. Weaknesses: Long-Term Commitment: Limited interest from some landowners in longterm contracts (+10 years) could hinder adoption of these models. Financial Constraints: Insufficient economic resources were identified as a barrier to implementing soil health-focused business models. Opportunities: Market Expansion: Participants identified new market opportunities and potential income generation as key drivers for adopting these models. Ecosystem Service Provision: The ability to provide ecosystem services like climate regulation offers opportunities for mitigating climate change impacts and enhancing human and environmental well-being. Threats: Consumer Awareness: Lack of consumer interest and the absence of official standards for recognizing soil health practices were identified as threats. 19 This project has received funding from the European Union’s HORIZON-AG - HORIZON Action Grant Budget-Based research and innovation programme under grant agreement GA 101091268 Market Competitiveness: Concerns were raised about the competitiveness of products derived from these models compared to cheaper, non-European alternatives. Incentive Preferences by Country: The report also details the primary incentives identified by participants from each country and an external group: Direct PES: Favoured by most countries (Bulgaria, France, Germany, Italy, Spain) and the external group. (Usually the target is to reward specific land management practices that benefit the environment). Subsidies: Bulgaria, Latvia, and Spain identified subsidies as a significant incentive. (Usually the target is to support a particular industry or activity, not necessarily tied to environmental outcomes). Marketing Labels: Germany placed a high value on marketing labels associated with certifications. Corporate Social Responsibility: Italian participants viewed this as a relevant incentive. Legal Measures: The external group identified legal prohibitions as a potential driver. Green Bonds: The external group saw potential in green bonds as a financial instrument. On the other hand, the barriers identified by Country were: Information Gap: Lack of information about soil health business models was a prevalent barrier across most countries (Bulgaria, France, Germany, Italy, Latvia). Policy Shortcomings: The absence of policies to facilitate implementation was a major concern for Italy and Spain (also identified by the external group). Economic Limitations: Financial constraints were a concern for France and Latvia. Landowner Disinterest: Bulgaria and the external group highlighted a lack of interest among landowners. Societal Appreciation: Germany expressed concerns about limited public appreciation for these models. This comprehensive analysis provides valuable insights into the factors influencing the success and adoption of soil health business models within the agricultural sector. 3.3 Soil management practices 20 This project has received funding from the European Union’s HORIZON-AG - HORIZON Action Grant Budget-Based research and innovation programme under grant agreement GA 101091268 The question of soil management practices is at the heart of the new proposal directive 5th of July 2023 of the European Parliament and of the council on Soil Monitoring and Resilience . In recital 37, it indicates that “To maintain or enhance soil health, soils need to be managed sustainably. Sustainable soil management will enable the longterm provision of soil services, including improved air and water quality and food security. It is therefore appropriate to lay down sustainable soil management principles to guide soil management practices. Furthermore, in recital 40 “In order to ensure that the best sustainable soil management practices are implemented, Member States should be required to closely monitor the impact of soil management practices and adjust practices and recommendations as necessary, taking into account new knowledge from research and innovation ». ‘Sustainable soil management’ has been defined as “soil management practices that maintain or enhance the ecosystem services provided by the soil without impairing the functions enabling those services, or being detrimental to other properties of the environment” (art. 35) and “soil management practices’ mean practices that impact the physical, chemical or biological qualities of a soil” (art. 3-6).Moreover, Member states “shall take at least the following measures, taking into account the type, use and condition of soil: (a)defining sustainable soil management practices respecting the sustainable soil management principles listed in Annex III to be gradually implemented on all managed soils and, on the basis of the outcome of the soil assessments carried out in accordance with Article 9, regeneration practices to be gradually implemented on the unhealthy soils in the Member States; (b)defining soil management practices and other practices affecting negatively the soil health to be avoided by soil managers » (art. 10-1). In the D2.1, a systematic review was conducted using Web of Science, Scopus, and Google Scholar. Search terms included "soil (health OR quality)" and "agriculture." Studies were selected based on pre-defined criteria including field-scale experiments, publication in English, and location within Europe. Data was extracted on soil characteristics (type, texture, sampling depth), health indicators (SOC, pH, bulk density), and management practices employed. A separate search using Google Scholar examined the acceptance of these practices by European farmers. Soil health is a multi-faceted concept, and the most relevant indicators differ by land-use type. In croplands, key indicators include soil organic carbon (SOC), nitrogen (N), phosphorus (P), pH, and heavy metal content. Urban environments prioritise trace elements, biodiversity, and compaction. Forest ecosystems rely on indicators like N, P, aluminium (Al), and measures of soil biota. As well as, soil health varies across Europe's climatic zones. The success of management practices depends on local conditions. For example, conservation tillage and cover crops are particularly beneficial in 21 This project has received funding from the European Union’s HORIZON-AG - HORIZON Action Grant Budget-Based research and innovation programme under grant agreement GA 101091268 Mediterranean climates prone to erosion [8]. Biochar amendments may have a greater positive influence on carbon accumulation in cool temperate zones. This review identified 20 sub-categories of soil health management practices categorised into eight main groups (e.g., conservation tillage, cover crops, organic farming). Studies have shown that implementing multiple practices often leads to greater soil health improvements compared to single practices. In croplands, practices promoting minimal soil disturbance (reduced tillage, no tillage) and maintaining living ground cover (cover crops) were found to be particularly beneficial in Mediterranean climates. Biochar amendments exhibited a greater positive influence on carbon accumulation in cool temperate zones. However, the study identified a large variation in carbon accumulation rates across all practices, highlighting challenges for farmers seeking income from carbon sequestration. A separate review explored the acceptance of these practices by European farmers. Crop rotation, manuring/composting, and reduced tillage are the most widely adopted practices, likely due to support from agri-environment schemes. Economic considerations, knowledge gaps, and logistical challenges can hinder the adoption of some practices (e.g., organic amendments, cover crops). Social factors like public perception and farmer attitudes towards sustainability also influence adoption decisions. Forestry and urban soil management practices in Europe have a significant impact on soil health. In the forestry sector, timber harvesting, even with reduced impact methods, reduces soil carbon stocks. Reforestation can increase soil organic carbon content, but also contributes to acidification. Management strategies to minimise negative impacts on soil health include leaving residues on the ground, reducing machinery pressure on the soil, and avoiding harvesting in wet conditions. Landowner decisions to participate in afforestation (converting farmland to forests) are primarily driven by economic considerations rather than soil health considerations. In urban areas, the major threats to soil health are pollution, compaction, and biodiversity loss. Urban green spaces and community gardens have minimal influence on soil quality compared to pre-existing soil properties. Sealing soil surfaces through construction is a widespread threat that negatively impacts soil functions and ecosystem services. Planting diverse tree species with deep root structures and using organic amendments are recommended practices to improve urban soil health. Urban soils store significant amounts of carbon. More research is needed to explore the social and economic acceptance of urban soil management practices besides urban agriculture. In croplands, practices that maintain living roots, like cover cropping, improved soil health in Mediterranean areas. However, these practices can also raise soil pH. This highlights the need for tailored advice based on specific locations. 22 This project has received funding from the European Union’s HORIZON-AG - HORIZON Action Grant Budget-Based research and innovation programme under grant agreement GA 101091268 Soil health assessments require considering chemical, biological, and physical factors. While soil carbon is a common indicator, it doesn't directly assess biodiversity. The development of a European soil biota database is recommended for future monitoring. Several practices were identified that improve soil carbon accumulation across various climates, including establishing hedgerows, incorporating biofuel crops, and reducing tillage. The report emphasises the importance of considering past land use and subsoil health. Many studies lacked information on past management or only analysed the topsoil, which can underestimate the impact of practices. Land manager awareness and economic factors are crucial for adoption of soil health practices. Educational programs and economic incentives are essential to encourage participation. For practices that generate positive benefits for farmers, such as low investment costs and positive effects on yields, it is essential to communicate and raise awareness of these positive effects. For practices that are more costly for the farmer, for example, due to the need to invest in new technology, incentives must be created to make these practices attractive. Different business models would be conceivable, so it is an important next step to analyse the acceptance of such models. The report highlights the need for further research on soil health in urban areas and business models for sustainable soil management. Practices with high soil health benefits but high adoption barriers, like agroforestry, require innovative solutions. 3.4 Business model innovation D2.2 The “Report on Business Models and Social Innovations” analyses existing incentives related to soil health and ecosystem services and emphasises their importance in promoting sustainable practices in agriculture. It summarises the legal requirements underlying the three business models and explores how incentives can drive farmers to adopt sustainable practices and improve soil health. The report mainly focuses on the three incentive types (also referred to as business models) identified in deliverable 1.2. It focuses on Agri-Environmental Schemes (PES), Carbon Credit Markets (CM), and Value Chain Payments (VCP). Collective implementation approaches were found to exist within all the three incentive types and thus not considered as a separate business model. The legal framework and the ability of the various business models to comply are decisive for the success of the business models. The draft of the regulations for carbon credit certification in the EU (regulation 2018/841), and what is known about the upcoming regulation for the labelling of sustainable products is, therefore, summarised in the report. 23 This project has received funding from the European Union’s HORIZON-AG - HORIZON Action Grant Budget-Based research and innovation programme under grant agreement GA 101091268 Based on the legal frameworks, the business models of public payments for ecosystem services and value chain payments for ecosystem services are identified as the most promising alternatives. Public payments are important as payments through the CAP are the most important funding source. Furthermore, farmers seem to prefer action-based governmental payments above result-based payments through carbon markets. Value chain payments hold potential because the interest of companies to offer payments through the value chain may strongly increase as larger companies must reach climate neutrality by 2050. For the business model based on carbon credit markets it was found that soil health measures on arable land can increase soil organic carbon, but that they hold a high risk of reversibility. Therefore, soil health measures are unlikely to fulfil the long-term storage requirements that are required for EU carbon credit certification. Researchers interested in this business model should consider focusing on farmers’ acceptance for contracts that demand agroforestry, afforestation, or peatland rewetting. Next, the report delves into the critical role of various financial and nonfinancial incentives in promoting sustainable practices in agriculture. The incentives that might play a role were identified by conducting a literature review. The review included articles on farmers’ acceptance of the three business models. The literature review allows researchers and politicians to evaluate the business models by displaying how effectively already included incentives promote farmers’ willingness to engage in business models, and by showing that other incentives (e.g. training and education) could also be offered to further stipulate farmers’ engagement. Interestingly, the report also underscores the significance of the perceived co-benefits, such as improved soil quality and reduced erosion, which significantly influence farmers' decisions. These co-benefits, alongside the potential to generate carbon credits or receive payments over PES or VCP, motivate farmers to apply soil health measures. In addition to this, the report considers socioeconomic factors, which explain why certain farmers are more or less likely to participate in the business models. This, in theory, allows to identify groups within the farming community, and the business models that might be the most suitable for these groups. However, the literature review showed that few articles considered socio-economic factors in their analyses, and that little research is available on farmers’ acceptance of VCP. Besides this, the report provides some insights into consumers’ willingness to pay for products labelled as more environmentally friendly, as this is decisive for the success of the VCP business model. By evaluating business models, the report provides valuable insights on how to potentially promote soil health practices. Overall, the report concludes that the success of any soil health business model depends on the following aspects: The business models need to be environmentally effective, able to comply with regulations, and accepted by consumers and farmers. Overall, 24 This project has received funding from the European Union’s HORIZON-AG - HORIZON Action Grant Budget-Based research and innovation programme under grant agreement GA 101091268 D2.2 serves as a valuable resource for researchers, policymakers, and stakeholders in the agricultural sector. 3.5 Incentives D3.1 “Report on mapping existing incentives for sustainable soil health business models” provides a comprehensive analysis of existing incentive structures relevant to soil health, ecosystem service provision, and the goals outlined in the 2030 Agenda for Sustainable Development. It emphasises the critical role incentives play in promoting the adoption of sustainable land-use practices in agricultural, forestry, and urban environments. The report specifically focuses on incentive structures within agricultural ecosystems, particularly those that target soil health improvements and their subsequent impact on land-use behaviours, management strategies, and the development of sustainable agricultural business models. Ecosystem services encompass a diverse suite of benefits delivered by natural systems that underpin human survival and quality of life. These services can be categorised into four distinct groups: 1Provisioning Services: Include essential resources for human sustenance, such as food and water. 2Regulating Services: Play a crucial role in maintaining environmental stability through processes like climate regulation and flood control. 3Cultural Services: Provide non-material benefits associated with human interaction with nature, including recreation and spiritual enrichment. 4Supporting Services: Underpin the functioning of all other ecosystem services by maintaining the fundamental ecological processes necessary for life on Earth. Incentive structures serve as a key mechanism for promoting the sustainable provision of ecosystem services and increase of soil health by influencing landuse and management practices. A prime example is Payment for Ecosystem Services (PES) schemes, which offer financial rewards to land managers in exchange for implementing practices that enhance critical ecosystem services like soil health, biodiversity, and carbon sequestration which are very close related to soil health indicators proposed by the European proposal of Soil Monitoring Law. By directly rewarding positive outcomes in ecosystem service provision, incentives can encourage the adoption of practices that generate a win-win situation for both environmental health and human wellbeing. The adoption of sustainable practices in agriculture and forestry can be influenced by a diverse range of incentives, encompassing both monetary and non-monetary rewards: - Monetary Rewards: Comprise direct financial compensation, such as PES schemes, that motivate land managers to adopt sustainable practices. 25 This project has received funding from the European Union’s HORIZON-AG - HORIZON Action Grant Budget-Based research and innovation programme under grant agreement GA 101091268 - Social Recognition: Aims to influence behaviour by highlighting positive actions and fostering cultural norms that support sustainability through mechanisms like public acknowledgment or awards. The strategic combination of these incentive types can significantly enhance the adoption and efficacy of sustainable practices, ultimately leading to improved soil health and associated ecosystem services. The NOVASOIL case studies highlight specific incentive structures that have demonstrably promoted soil health and sustainable agricultural practices. These include: - Payment for Ecosystem Services (PES) schemes: Provide financial rewards for adopting practices that enhance soil health, biodiversity, and ecosystem services. - Direct payments for land set aside: Offer financial compensation for taking land out of production, allowing natural processes to restore soil health and biodiversity. - Improved market access through certification and marketing labels: Facilitate access to premium markets for products grown using sustainable practices, potentially increasing profitability. - Training programs for farmers: Equip land managers with the knowledge and skills necessary to implement sustainable practices that enhance soil health. Collectively, these incentives have proven effective in motivating farmers to adopt sustainable practices, leading to improvements in soil health, biodiversity, and overall ecosystem service provision. Incentive structures for promoting soil health encompass a wide range of approaches, including: - Regulatory Mechanisms: Mandate specific practices through laws and regulations. - Voluntary Mechanisms: Rely on the willingness of land managers to participate in programs offering rewards or recognition. Incentives can also be categorised as either: - Positive Incentives: Offer rewards such as financial compensation or improved market access. - Disincentives: Discourage undesirable practices through penalties or fines. By strategically combining different incentive types, stakeholders can optimise ecosystem service outcomes while minimising societal costs. The results obtained in D3.1 highlighted the complex influence of incentives on ecosystem services within agricultural ecosystems. Incentives can trigger intended and unintended changes in land-use practices, impacting multiple ecosystem services simultaneously, with potential co-benefits and trade-offs. 26 This project has received funding from the European Union’s HORIZON-AG - HORIZON Action Grant Budget-Based research and innovation programme under grant agreement GA 101091268 It was collected and analysed 223 incentives in 10 countries participating in the NOVASOIL project. The countries were classified into three groups according to the number of incentives. The first group includes Bulgaria, Denmark, Estonia, Latvia, and Spain with a range from 8 to 10 incentives. The second group consists of Germany, England, France, and Italy, with a range from 16 to 30 incentives. The third group consists only from the Netherlands, with 76 incentives. The Netherlands stands out with a high number of predominantly policy-driven incentives. In contrast, countries like Germany, England, France, and Italy have a considerable number of voluntary incentives. The other countries in the dataset have a smaller number of incentives, and their distribution is relatively balanced between policy-driven and voluntary approaches. The study focused on identifying and evaluating incentives that promote sustainable business models from a soil health perspective. It explores farmer motivations for improving soil health and translates these factors (incentives) onto the Business Model Canvas (BMC). By mapping incentives, the report aims to understand their contribution to the current state of the business model and potential soil health improvements. This approach seeks to answer the question: how effectively can soil health business models contribute to sustainable and competitive agriculture? 4 Business models As was described in D1.1, business model features refer to characteristics or characteristics that may describe and distinguish a business model type. The vast number of potential business models and the project's inherent innovation make it challenging to comprehensively describe and analyse each one individually. A set of model features were selected to classify: Fundability: Models are evaluated based on their ability to justify funding. This evaluation considers alignment with Europe 2050 objectives, situational market fit, historical trends, and a demonstrably positive cost-benefit analysis, free from administrative bias. Profitability: Financial analysis of the restorative business model demonstrates positive cash flow, as evidenced by income and expense data. Additionally, the model exhibits potential for reinvestment within the business. Feasibility: The assessment of the business model utilises reliable models with a long lifespan and semi-constant data. Assessability: Effective and feasible monitoring practices are employed. Monitoring is conducted in accordance with EU policies and avoids overly aggressive tactics. Comprehensible indicators are utilised to measure changes over time. 33 This project has received funding from the European Union’s HORIZON-AG - HORIZON Action Grant Budget-Based research and innovation programme under grant agreement GA 101091268 AREFLH11 50-59 Ireland Male AREFLH12 30-39 Greece Male AREFLH13 50-59 Greece Male AREFLH14 30-39 Greece Male Table 2. List of participants from external countries Figure 8. Incentives selected by the external group (n=14). The report further explores potential impediments to the successful adoption of business models promoting soil health. Legal restrictions, limitations on land-use rights, and obligatory farm set-asides were identified as aspects requiring attention to facilitate the widespread implementation of sustainable practices. This comprehensive analysis of stakeholder perspectives across various European countries (Bulgaria, France, Germany, Italy, Latvia, Spain) and beyond (Greece, Ireland, Netherlands, UK, Denmark, Chile) has shed light on the key incentives and barriers influencing the adoption of soil health business models. Incentives: - Direct payments and subsidies: Across most surveyed countries, stakeholders identified direct financial support like subsidies and payments for ecosystem services as a critical driver for implementing sustainable soil management practices. This finding highlights the importance of economic incentives in promoting a shift towards soil health-focused agriculture. - Market-based mechanisms: The German and Italian cases demonstrate the potential of market-based solutions like certification schemes and 34 This project has received funding from the European Union’s HORIZON-AG - HORIZON Action Grant Budget-Based research and innovation programme under grant agreement GA 101091268 corporate social responsibility initiatives in fostering soil health practices. Barriers: - Legal restrictions: Stakeholders from some countries, particularly Greece, pointed to legal prohibitions as a significant barrier hindering the adoption of new business models. Further research is needed to explore the nature of these restrictions and potential solutions. - Limited awareness of alternatives: The selection of "green bonds" as a secondary incentive in some countries suggests a potential need for increased information dissemination regarding diverse financing options for soil health businesses. Overall, the study emphasises the need for a multi-pronged approach: - Financial incentives: Direct payments and ecosystem service rewards can play a significant role in encouraging a transition towards sustainable practices. - Market mechanisms: Policy frameworks that encourage and recognize sustainable agriculture practices can incentivize private sector involvement and consumer demand. - Addressing legal barriers: Efforts to streamline regulations and identify innovative solutions that support soil health initiatives are crucial. - Knowledge sharing: Raising awareness about alternative financing options and successful soil health business models can further promote their adoption. By implementing these recommendations, stakeholders across the agricultural sector can work together to facilitate the widespread adoption of soil health business models, leading to a more sustainable and resilient agricultural future. 4.3 Contract length preferences In addition to exploring incentives and barriers, the study also delved into stakeholder preferences regarding contract durations for soil health business models across three land-use types: agricultural, forestry, and urban. D1.2 provides an overview of contract length preferences for soil health business models in various land uses across Bulgaria, France, Germany, Italy, and Spain. The data presented in the PDF file highlights the differences in preferred contract durations for agriculture, forestry, and urban sites in each country. Bulgaria: - Forestry land uses: A high preference for 20-year contracts was observed. - Agriculture land uses: 5 and 10-year contracts were the most voted. - Urban land uses: 10-year contracts followed by 20-year contracts were selected. 35 This project has received funding from the European Union’s HORIZON-AG - HORIZON Action Grant Budget-Based research and innovation programme under grant agreement GA 101091268 France: - Agriculture land uses: 5-year contracts were the most preferred. - Forestry and Urban land uses: 20-year contracts were the top choices. Germany: - Agriculture land uses: 5-year contracts were predominant. - Forestry and Urban land uses: 20-year contracts were favoured. Italy: - Agriculture land uses: 5 and 10-year contracts were most preferred. - Urban land uses: 5-year contracts followed by 20-year contracts were selected. - Forestry land uses: 10 and 20-year contracts were the top choices. Spain: - Agriculture land uses: 5-year contracts were predominant. - Forestry land uses: 20-year contracts were favoured. - Urban land uses: Varied preferences between 1, 5, and 20-year contracts were observed. Latvia: - Agriculture land uses: 5-year contracts were predominant as well. - Forestry land uses: 10-year contracts were most preferred - Urban land uses: 1 year was selected as preferred. It was an unexpected result according to other countries’ results. This analysis of stakeholder preferences in Bulgaria, France, Germany, Italy, and Spain reveals a clear trend: contract duration preferences are highly dependent on the land-use type. Forestry: A strong preference for long-term contracts (20 years) emerged across most countries for forestry use. This aligns with the long growth cycles of trees and the need for sustained soil health management for long-term forest productivity. Agriculture: Preferences in agricultural settings were more varied. While 5year contracts were dominant in France, Germany, and Spain, Bulgaria and Italy showed a preference for both 5-year and 10-year options. This suggests a potential balance sought between flexibility for adapting to changing agricultural practices and achieving long-term soil health benefits. Urban: Urban land uses presented the most diverse preferences. While some countries favoured 10-year contracts (Bulgaria, Italy), others leaned towards shorter (1-year) or longer (20-year) options (Spain). This likely reflects the dynamic nature of urban development and the varying goals for soil health management in urban settings. 36 This project has received funding from the European Union’s HORIZON-AG - HORIZON Action Grant Budget-Based research and innovation programme under grant agreement GA 101091268 The study highlights the importance of considering land-use type when structuring contracts for soil health business models. Different land uses require different approaches to achieve optimal soil health outcomes. As well as, findings suggest a need for adaptable contract structures that balance the need for flexibility with the long-term nature of soil health improvement, particularly in forestry settings. The observed variation in preferences across countries suggests the need for further research to understand the specific reasons behind these differences. Cultural factors, land ownership structures, and policy frameworks may play a role. By understanding stakeholder preferences and tailoring contract durations to land-use specificities, soil health business models can be optimised for greater success and long-term impact. 5 Conclusions The report emphasizes the significance of financial incentives, particularly Direct Payments for Ecosystem Services (PES) and carbon credits, in motivating the adoption of soil health practices. However, a lack of readily available information and supportive policy frameworks were identified as significant obstacles by stakeholder groups. Strengths highlighted in the report include stakeholder expertise in soil assessment and established local practices, along with the potential for tailored monitoring systems. Furthermore, the long-term sustainability potential of these models in enhancing soil health and associated ecosystem services is promising. Regarding weaknesses, the report identified limited interest from some landowners in long-term contracts, existing financial constraints, and the absence of established consumer interest and official standards for recognizing soil health practices. On the other hand, the report identified opportunities for the future include market expansion, potential income generation for farmers, and the ability to contribute to climate regulation through improved soil health. However, the report acknowledges potential threats such as a lack of consumer awareness, market competition, and legal restrictions in certain countries. The study concludes by emphasizing the need for knowledge dissemination, targeted policy interventions, and a strategic approach that leverages existing strengths and opportunities. By addressing these critical aspects, the widespread adoption of soil health business models within the agricultural sector can be fostered, leading to a more sustainable future. 37 This project has received funding from the European Union’s HORIZON-AG - HORIZON Action Grant Budget-Based research and innovation programme under grant agreement GA 101091268 6 Acknowledgment The authors would like to thank the EU for funding, in the frame of the European Union’s Horizon Europe research and innovation programme under Grant Agreement GA 101091268. The document reflects only the author’s view. 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