EC: €1.1 billion German scheme to support rail operators using electric traction

EC: €1.1 billion German scheme to support rail operators using electric traction
@Deutsche Bahn AG / Jochen Schmidt

The European Commission has approved €1.1 billion to compensate rail operators using electric traction for the recent rise in electricity prices.

According to the EC, this measure will contribute to ensuring that the rail sector remains competitive while preserving the environmental performance of electric rail, in line with the objectives of the Commission's Sustainable and Intelligent Mobility Strategy and the European Green Deal.

The scheme will cover electricity consumed between 1 January 2023 and 31 December 2023.

The approval comes after Germany informed the Commission of its intention to introduce a €1.1 billion scheme to support rail freight and passenger operators using electric traction. The aim of the scheme is to help rail operators cover part of the additional electricity costs resulting from the exceptional increase in electricity prices in the context of Russia's war against Ukraine. In doing so, the scheme aims to support and maintain the modal shift from road to rail using electric traction, thus promoting a more environmentally friendly mode of transport.

Under the scheme, aid will take the form of monthly reductions in the electricity bills of freight and passenger rail operators. The electricity suppliers will then only be reimbursed by the German State for the economic support provided to the rail transport operators.

The Commission has assessed the measure under the EU rules on state aid and has concluded that:

  • the scheme is beneficial for the environment and mobility, as it supports rail transport using electric traction, which is less polluting than road transport and decreases road congestion
  • the measure is necessary and appropriate to achieve the objective pursued, namely to support and preserve the modal shift from road to rail transport using electric traction in a situation of exceptionally high electricity cost
  • the scheme is proportionate, i.e. limited to the minimum necessary, as the aid remains below the maximum thresholds set out in the Railway Guidelines
  • the aid is limited to reducing the competitive disadvantages faced by rail transport using electric traction compared to road transport. Therefore, the measure will not have undue negative effects on competition and trade in the EU

The Commission therefore approved the German measure under EU state aid rules.

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