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EU State Aid Rules EUR 1.1bn German Scheme to Support Electric Rail Transport

EU State Aid Rules EUR 1.1bn German Scheme to Support Electric Rail Transport
photo: Archive/EU State Aid Rules EUR 1.1bn German Scheme to Support Electric Rail Transport
27 / 02 / 2023

The European Commission has approved a German scheme worth EUR 1.1 billion, which is intended to compensate rail operators using electric traction who are struggling with recent spikes in electricity prices.

The approval of this measure is in line with the European Union's sustainability objectives, particularly the Sustainable and Smart Mobility Strategy and the European Green Deal. These initiatives aim to reduce greenhouse gas emissions and promote a greener means of transportation to contribute to a more sustainable future.

This move by the German government is particularly significant in light of the recent surge in electricity prices brought about by Russia's war against Ukraine. The increase in electricity costs has resulted in rail transport operators using electric traction experiencing additional expenses. The German scheme aims to help these operators by covering part of the electricity costs incurred during the period between 1 January 2023 and 31 December 2023.

The support provided by the German government will take the form of monthly reductions in the electricity bills of the rail transport operators. The aid will then be reimbursed by the German state to the electricity suppliers only for the economic support provided to the rail transport operators. This will be instrumental in ensuring that the rail sector remains competitive while maintaining its environmental performance in the context of the increase in electricity prices.

In approving the German scheme, the European Commission assessed it under the EU State aid rules and found that it was beneficial for the environment and mobility. It also found the measure to be necessary and proportionate to achieve the objective pursued, which is to support and preserve the modal shift from road to rail transport using electric traction.

The approval of this measure follows the Commission's previous approvals of other German schemes supporting rail passenger and freight operators as well as rail freight operators. These schemes are aimed at promoting rail transport, which is less polluting than road transport and helps reduce road congestion.

In summary, this German scheme is a vital initiative in supporting the rail transport sector in these challenging times. It will contribute to promoting the use of electric traction for rail transport, which is more environmentally friendly than road transport. By providing aid to rail transport operators, the German government is promoting a greener means of transportation while ensuring that the rail sector remains competitive.