2.5 billion German rail support approved

The European Commission has given the green light for 2.5 billion euro state aid of the German government to support the rail sector in the coming years. The money should benefit both passenger and rail freight transport.

The bulk of the money from the German government, 2.1 billion euros, will be used to increase the compensation that carriers can receive when using the rail. This brings the compensation that freight transporters and passenger transport can expect to be a maximum of 98 percent. The aid measure runs until 31 May 2022 and is intended to ensure that the rail sector does not lose market share to road transport.

The European Commission has to approve when EU countries give state aid to make sure it complies with EU rules and so that grants are justified and not give companies an unfair advantage.

Costs of using tracks

410 million is now available in this second measure and is an adjustment to the German government’s 2018 plan to compensate rail freight operators for the costs of using the German tracks. At the time, it was agreed to make 350 million euros available for this up to and including 2023. With an adjustment, that amount will be increased to 410 million for the period from March 1, 2020 to May 31, 2021. This also means that the compensation that freight transporters can expect over that period is a maximum of 98 percent.

The measure was already amended earlier as well, back in May. The European Commission approved an increase in the available annual budget for 2021 from 350 to 567 million euros.

Corona difficulties

“With the measures adopted, freight and passenger transport in Germany can better defend itself against the difficulties caused by the corona crisis. These steps should maintain their competitiveness vis-à-vis other modes of transport, something that is also in line with the objectives of the European Green Deal”, said Margrethe Vestager, European’s Commissioner in charge of competition policy, last Friday.

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Author: Nick Augusteijn

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