EU Scraps Lisbon Metro Bid After Probe Into Chinese State Aid

Tensions between Brussels and Beijing are rising after the EU acted against Chinese rail giant CRRC over alleged state subsidies. The European Commission cancelled the Lisbon metro tender and a new contract was awarded to Poland’s PESA.

The European Commission has concluded its investigation into state-owned rolling stock manufacturer CRRC. It found that the Chinese company received state subsidies at a level that allowed it to submit the lowest bid in the tender for the design, construction, and maintenance of the Purple Line in Lisbon.

The tender, launched in April 2025 by metro operator Metropolitano de Lisboa, attracted four consortia with bids ranging from €599 million to €716 million. The lowest bid, €598.8 million, was submitted by a consortium consisting of CRRC and Portuguese company Mota-Engil, with CRRC responsible for supplying 12 trainsets.

EU clears Lisbon metro contract after CRRC dropped from bid over Chinese subsidies //t.co/7y2CkrdIUK

— Railway Gazette International (@railwaygazette) April 24, 2026

Chinese Bid Under Brussels Scrutiny

CRRC (China Railway Rolling Stock Corporation) is the largest manufacturer of rail vehicles and railway technology in China and globally. The state-owned company, headquartered in Beijing, designs, manufactures, and maintains high-speed trains, locomotives, metro vehicles, and trams.

"The in-depth investigation confirmed these preliminary findings and revealed that the subsidies in question indeed provided the consortium with an unfair competitive advantage to the detriment of other bidders and the integrity of the EU internal market," the European Commission said in a statement.

The Commission found that CRRC had received state support and subsidies "amounting to billions of euros." Although officials did not have access to all accounting records, they based their conclusion on "available facts," a legal provision allowing regulators to draw conclusions when a party fails to cooperate or provides insufficient information.

Officials identified subsidies granted to the CRRC group, tax advantages—including a reduced rate from 25% to 15% for some subsidiaries—pre-tax deductions, preferential loans and bonds, as well as cases of "non-transparent public procurement." Brussels also identified a "de facto" state guarantee that reduced costs and enabled the company to subsidise its innovation capacity.

Rising Tensions Between Brussels and Beijing

The China Chamber of Commerce to the EU stated that the European Commission had given companies extremely short deadlines—often only two to three days—to submit complex documentation, without sufficiently taking into account the time needed to collect materials from abroad. According to the Chamber, this undermined the effective exercise of Chinese companies’ right to a fair process.

The Chamber also criticised the Foreign Subsidies Regulation as an "arbitrary" and "discriminatory" instrument used to exclude Chinese companies from European markets.

This decision is expected to become another element in a series of disputes between Beijing and Brussels over the EU’s foreign subsidies rules. China’s Ministry of Commerce had already expressed strong opposition in December 2025 to investigations of Chinese companies under this regulation, citing CRRC and partially state-owned scanner manufacturer Nuctech as examples. The Ministry described the EU’s actions as "serious, targeted, and discriminatory" and pledged to use necessary means to defend its interests.

New Tender Awarded to Poland’s PESA

The European Commission opened its investigation into potential market distortion in November 2025, leading to the cancellation of the Lisbon tender and the launch of a new procedure.

In mid-April 2026, Polish manufacturer Pesa won the new tender. The European Commission reviewed the case and found that Pesa had not received subsidies at a level that would distort market conditions.

This is notable given that Pesa Bydgoszcz is controlled by the Polish state development fund PFR and recently secured €1.6 billion in financing, partly intended to expand exports.

The China Chamber of Commerce responded by stating that CRRC had acted only as a subcontractor with less than a 10% share of the contract and argued that the Commission had not provided sufficient justification for excluding the company from the tender. The Chamber warned that current enforcement of the Foreign Subsidies Regulation increases the risk of selective application.

Growing Resistance to Chinese Expansion in Europe

The Commission’s investigation falls under stricter EU rules on public procurement and asset acquisitions, formally adopted in 2023. Both China and several European rail industry experts believe these rules were largely introduced in response to CRRC’s expansion efforts in Europe.

CRRC has already achieved success in Portugal, winning a tram supply contract in Porto and acquiring German locomotive manufacturer Vossloh Locomotives.

The Lisbon metro case is the second instance in which these additional EU subsidy controls have been applied to a CRRC bid. The first occurred in 2024 during a tender for passenger trains in Bulgaria, where CRRC withdrew before the investigation concluded and the contract was ultimately awarded to Spanish company Talgo.

At the end of 2025, further measures tightened access to the EU market. One trigger was the entry into commercial service of CRRC double-deck electric units with a private operator, prompting another wave of initiatives against Chinese expansion. Since then, “technological sovereignty” has become part of the European policy vocabulary.

“Made in EU” Push to Protect Domestic Industry

At the EU Competitiveness Summit in February, the Austrian Railway Industry Association (VBI) called for publicly funded projects to include a mandatory requirement of at least 50% EU-added value. VBI also urged a shift away from awarding contracts based solely on the lowest price towards lifecycle cost-based evaluation.

In early March, the European Commission followed up with a proposal for an Industrial Accelerator Regulation, aimed at prioritising products with high EU-added value ("Made in EU") and low carbon footprints in public procurement and state aid. The proposal also introduces the concept of strategic economic sectors.

The European Rail Supply Industry Association UNIFE responded by calling for rail manufacturing—absent from the original proposal—to be designated as a strategic sector. Last autumn, UNIFE also proposed additional measures to limit access of foreign manufacturers to EU public procurement.

Meanwhile, major European rolling stock manufacturers, facing difficult economic conditions in their home markets, continue expanding their production capacities in the United States.