600 million euros scheme for single wagon transport

A 600 million euro German scheme has been approved by the European Commission under the EU state aid rules. The scheme aims to provide support to single wagon rail freight transportation. With a duration until 30 November 2025, the measure is part of the broader Climate Action Programme 2030, established by the German Federal Government.

Specifically, the financial aid package will get distributed in the form of direct grants to rail freight operators. Its main objective is to relieve rail freight transport companies from excess charges related to the use of marshalling yards and train formation facilities. Single wagon transport accounts for approximately a quarter of Germany’s rail freight services, and is, thus, an essential component of the whole logistics chain in the country.

Modal shift

On top of that, single wagon transport, in Germany, has a key role in connecting critical industrial sites and supporting other forms of rail freight transport. The provision of such a financial relief means that its operational costs will see a significant reduction.

Understandably, lower costs directly imply that rail transportation will develop to an even more attractive market for investors. With single wagon transport having the potential of cheaper services, the modal shift from road to rail could get accelerated even more. Consequently, the measures will have a bilateral impact, both facilitating existing rail freight services and encouraging more customers to become part of the rail sector. Especially in harsh times like these, such developments can prove precious and with a long-term perspective.

EU State aid rules compatibility

In addition to the practical value of the measures, it is equally important to underline that the European Commission is considering them to be proportionate and in alignment with the maximum allowed aid intensities.

Furthermore, it is the Commission’s firm belief that the German scheme will allow fair competition to develop more on the benefit of rail freight, while at the same time complying to the EU’s environmental and transport objectives.

Source: railfreight.com