The effect of EU derogation strategies on the compliance costs of the nitrate directive

Within the framework of the nitrate directive, member states have the opportunity to apply for derogation, i.e. increasing fertilisation standards under certain conditions. Several EU regions have utilised this opportunity, but each in a different way, resulting in six very different derogation policies within the EU in 2009. This paper focuses on the differences between the policies applied and makes an assessment with regard to the impact of these differences on the application rate for derogation, the manure surplus and the cost of allocating manure. Based on the MP-MAS model described by Van der Straeten et al. (2010) the different scenarios are applied on a single case area (Flanders) and the economic effects have been simulated. Results show considerable differences between the policy alternatives, leading to the conclusion that member states not only have to focus on whether or not to allow derogation, but also on the actual details of the derogation policy. Granting derogation at parcel level (plot of land), instead of farm level, increases the potential effect of derogation; the level of increase in fertilisation standards under derogation determines the application rate for derogation: a higher increase leads to a higher application rate.

► Derogation is policy instrument in EU nitrate directive, allows disposal of more manure.
► Different variants are implemented and result in different cost reductions.
► Derogation behaviour is influenced by different farm and regional characteristics.
► Extent to which manure problem acts is important determinant.
► Parcel approach gives more opportunities than farm approach.