Germany breaks with ‘road finances road’, money will go to rail
Eighty per cent of the money from the CO2 surcharge of the German truck toll will from 2024 onwards go to railway investments, instead of road. This decision comes after a three-day retreat where the Government coalition partners negotiated a reform package, including transport. Significant investments in rail are promised, but there is an uncertainty margin of whether the necessary billions for rail infrastructure will be made available.
One of the key decisions made during the retreat was to break the financing cycle of the truck toll flowing back to road investments, which will now see future rail infrastructure projects financed instead from toll revenues. Along with an increase of the tolls via a CO2 surcharge of 200 euros per tonne in 2024, of which 80 percent of this will go to the railways. This should create more capacity and make a big difference for passenger and rail freight transport.
Though battle between road and rail
This law was long disputed between especially the FDP and the Greens, as the latter has long advocated for the shift of investments from truck tolls to rail. The German government is formed by a coalition of the centre left Social Democrats (SDP), the left leaning Green Party and the more centre-right FDP.
Ricarda Lang, leader of the Green Party, said it was a “though battle” on the front of road investments and acceleration of construction projects on Twitter. Though there is a big win, the Greens had to make a concession: While wanting to reduces the new construction and expansion of motorways and federal highways in their election programme, they now agreed that procedures for all major infrastructure projects are to be streamlined and accelerated, including highways. There will be no acceleration in new construction of roads, however.
Now it should also be possible to enforce selected motorways in a shortened procedure and not just railway lines, if the respective federal state so wishes. Greens leader Lang spoke of a “limited number of roads” for which this applies. FDP boss Lindner named “144 motorway projects” that were “classified as of outstanding interest” and given priority, undoubtedly a thorn in the side of the Greens.
45 billion necessary for rail
Deutsche Bahn needs about 45 billion euros to cover the investment requirements until 2027, according to the package document. Part of this will be financed by the increased truck toll, but no calculations are given of how much money this will bring in. In fact, the 45 billion investment is to be covered “as far as financially feasible”, it states, leaving room for the German government to not fulfil the requirement.
Deutsche Bahn welcomes the results of the coalition, noting that the decisions set the course for the rail network of the future. CEO Richard Lutz says that the “conditions are now in place to work with partners from the sector and industry to modernise and digitise the outdated rail infrastructure”.
“Clear commitment, but overall disappointing”
The main focus is on upgrading the outdated infrastructure, but the digitalisation efforts will also involve rolling stock. The use of the capacity and infrastructure of the federal government is first of all to be significantly increased by rolling out the digital capacity management, and secondly by expanding ETCS vehicle equipment.
“The coalition is now clearly committed to financing the digital equipment of locomotives and railcars – even beyond pilot projects. This is a clear directional decision in terms of rail digitalisation”, said Director of the Pro-Rail Alliance Dirk Flege in response to the package. “From now on, the federal government sees its responsibility not only for the modernisation of the infrastructure, but also for the vehicles”.
However, the Alliance is also critical of the plans, even calling measures “overall disappointing”. “The federal government does not have a consistent climate policy. In the transport sector in particular, the 16-page ‘modernisation package for climate protection and planning acceleration’ contains a hodgepodge of sometimes contradictory individual measures that are disappointing overall.”
Challenge of efficient use of the funds
It is no news that the infrastructure in Germany is inadequate. A damning report by the Federal Court of Audit about a “crisis at Deutsche Bahn” also emphasised that the rail infrastructure is outdated, and in 2022 more than every third long-distance train was delayed. With current proceedings, it will be “unlikely that the stated goals of twice as many rail passengers by 2030 and a 25-per cent share for rail in freight traffic will be achieved”.
Because the rail infrastructure as a whole has reached the limit of its capacity, a commission was formed to give advise on how to accelerate the infrastructural improvements, which published it findings in a report end of last year. Michael Theurer, who headed the commission, is pleased with the announced measures of the coalition, especially the allocation of revenue from truck tolls to the rails. “This brings us a great deal closer to the goal of a functional, punctual and customer-friendly railway. We are now faced with the common challenge of ensuring that these funds are used efficiently and in a targeted manner as part of an overall strategy.”