Commission approves €350m per year in funding to promote road to rail shift in Germany

Commission approves €350m per year in funding to promote road to rail shift in Germany

The European Commission has approved under EU State aid rules a German aid scheme to promote the shift of freight traffic from road to rail. The scheme will support rail freight operators in Germany in order to contribute to a reduction of road congestion and CO2 emissions.

Commissioner Margrethe Vestager in charge of competition policy, said: “Promoting the shift of freight transport from road to rail is one of many measures that Europe needs to take to help improve reduce our environmental footprint. The German aid scheme does exactly that – it supports this shift, ensures benefits are passed to customers and will contribute to meeting the EU’s environmental and transport objectives, without unduly distorting competition.”

In August 2018, Germany notified to the Commission a scheme to provide public support for freight transport by rail. The scheme has a yearly budget of €350m and will run from 2018 to 2023.

Under the scheme, rail freight operators will be compensated for up to 45 percent of their track access charges, i.e. the charges that railway undertakings have to pay for the use of the rail network.

It is expected that the rail freight operators benefiting from the scheme will pass on the benefits of the aid to their customers, i.e., the freight shippers, through lower prices. Rail freight operators will be obliged to inform their customers of the fact that their track access charges have been significantly reduced.

The Commission found that the scheme is beneficial for the environment and for mobility as it supports rail transport, which is less polluting than road transport, while also decreasing road congestion. The Commission also found that the measure is proportionate and necessary to achieve the objective pursued, namely to support the modal shift from road to rail.

As a result, the Commission concluded that the measure complies with EU State aid rules, in particular the 2008 Commission Guidelines on State aid for railway undertakings.

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17th December 2018