FOODCoST: FOOD Costing and Internalisation of Externalities for System Transition

Project Information

FOODCoST

Grant agreement ID: 101060481

DOI

10.3030/101060481

Project closed

EC signature date 7 June 2022

Start date 1 June 2022

End date 31 May 2026

Funded under

• Food, Bioeconomy Natural Resources, Agriculture and Environment

Total cost

€ 7 355 092,50

EU contribution

€ 7 355 091,50

Coordinated by

STICHTING WAGENINGEN RESEARCH
Netherlands

Periodic Reporting for period 2 - FOODCoST (FOODCoST: FOOD Costing and Internalisation of Externalities for System Transition)

Reporting period: 2023-12-01 to 2025-05-31

Summary of the context and overall objectives of the project

The overall objective of FOODCoST is to develop tools, policies and business models for pathways towards sustainable production and consumption in the food system through internalising positive and negative externalities. There are 4 specific objectives:
1. To build a FOODCoST stakeholder platform to cocreate new options for internalization of externalities with stakeholders with a Community of Practice (CoP), Mobilisation and Mutual Learning (MMLs) and case studies
2. To create a harmonized methodology for the valuation of externalities and an EU-global database of externality data. The FOODCoST VALUATION guide describes the steps needed to calculate external costs and benefits for externalities
3. To develop a framework for the internalization of externalities through policies and business models/strategies: The FOODCoST framework for INTERNALISATION. In order to underpin pathways towards sustainable food systems based on the internalisation of externalities, policies and business models and strategies will be identified
4. To assess the impact of internalising externalities and outline the FOODCoST Roadmap.

Expected outcomes are:
1. Better understanding by policymakers, businesses and other actors of challenges and opportunities in relation to the internalisation of externalities
2. Well-informed policy at all levels on the possible ways of steering decision-making towards sustainable food
3. Widespread use by policymakers, farmers and businesses of improved and harmonized approaches to identify, measure and value positive and negative externalities
4. Better internalisation of the positive and negative externalities so that the most sustainable and healthy food becomes the most affordable and available for consumers while generating fair economic returns in the supply chain in particular for farmers and SMEs

Work performed from the beginning of the project to the end of the period covered by the report and main results achieved so far

The project aims to achieve four specific objectives (SOs).

SO1: Building the stakeholder platform
The Community of Practice (CoP) was developed and 3 CoP meetings organized with 40+ active members. A total of 7 Mobilisation and Mutual Learning workshops (MML) were organised with a total of 109 participants. Stakeholder interaction is aided by Communication and Dissemination, through e.g. a video; newsletter, publication in the Project Repository Journal;; email marketing campaigns; social media communication; and our website. The 11 FOODCoST case studies are also important for stakeholder interaction. During the last 1.5 years, several workshops were organized to implement the case studies. E.g. in the Case Study Plenary in May '25, all case studies presented key findings. Finally, work on case study reflections and implications started in this period.

SO2: Creating a harmonized methodology and EU-global database
FOODCoST worked on an overview of True Cost Accounting (TCA) methodologies. A description and comparison of 7 TCA approaches was made, and different modules were developed for the measurement and valuation of various externalities. An overview of data sources for TCA has also been compiled. The EU-Global database of external costs has been submitted as a deliverable. Work on measuring of the degree of internalization related to policies and a FOODCoST Valuation Guide are in progress. This work interacts with the case studies.

SO3: Developing a framework for internalisation of externalities through policies and business strategies
A description of policy instruments to internalise externalities was made in Reporting Period 1. In the last 1.5 years there focus was on the policy modelling framework, with macro-economic policy models MAGNET and CAPRI, and micro-models. A meta-analysis of consumer price elasticities was made and its application in the FOODCoST toolbox discussed. The MAGNET and CAPRI models have been enhanced and used in case studies. The FOODCoST policy modelling framework for internalisation was submitted as a deliverable.

The “Description of business models and strategies for the internalization of externalities in agri-food value chains” and “Mapping lock-ins to the internalization of externalities in agri-food systems” were submitted in May 2024. A framework for the categorization of Business Models for the Internalization of Externalities (BM4IOE) was developed. Themes for IOE were identified: value chain product and process innovation; re-arranging value chain; measurement and accreditation tools; consumers/market recognition; innovative financing. The framework and barrier mapping were combined into a single matrix to help businesses to anticipate challenges. In addition, the “FOODCoST Business and Value chain internalisation tools” were finalized.

SO4: Assessing the impact and developing a roadmap
Based on various output and literature, 3 scenarios and a baseline scenario for combined policy and business strategies for internalisation of externalities have been co-created. The scenarios were developed through qualitative impact analysis with stakeholders, incorporating case study insights and internalisation strategy learnings. One of the tasks aims to develop an integrated toolbox to assess the welfare and sustainability impacts of scenarios. Quantitative assessments using the CAPRI and MAGNET models will be complemented by a visualizer tool to display impacts across sustainability categories and key strategies, highlighting trade-offs and synergies. A monitoring framework for the internalization of externalities has been co-created, based on priorities in the New Vision for Agriculture and the Competitiveness Compass.

Progress beyond the state of the art and expected potential impact (including the socio-economic impact and the wider societal implications of the project so far)

- Broader audience of policy makers and business actors: Various actors are involved in the case studies. E.g. in one case study, a way to express the consumer health impact of a company to investors is being developed, which does not exist today. The proposed investor facing metrics and internal evaluation are furthering the state of art. MMLs and CoP meetings and communication and dissemination have reached a variety of stakeholders.
- Available methodologies and externalities considered: Comparing different approaches leads to new insights into the feasibility of harmonization and the usefulness of TCA in different situations. FOODCoST develops new modules for TCA, for e.g. animal welfare and living income.
- Data source and collection: A major contribution has been the development of the EU-Global database of external costs.
- Tools to assess policy interventions: This is part of the FOODCoST toolboxes, improvements to the macro-economic models CAPRI and MAGNET have been made to include externalities.
- Business strategies: Assessments of business strategies and barriers to internalization of externalities have led to new insights. The Business Models for the Internalization of Externalities (BM4IOE) framework and barrier mapping were combined into a single matrix to help businesses.
- Tools to assess business strategies: New tools have been developed.
- Models integration: The macro-models and micro-models as well a qualitative assessments of externalities and internalization strategies are being integrated in the FOODCoST scenarios. This is part of our report, in which scenarios for internalisation are described.