DAC in Central Europe Came to an End, Financing Is to Blame

Central European countries have pulled out of the digital automatic coupling testing project due to lack of funding, which means many question marks for the future.

The project to test digital automatic coupling (DAC) on so-called pioneer, or test, trains will not happen in Central Europe. Following new information on funding eligibility, Czechia, Poland and Slovakia have to withdraw from the project. The Central European region is now excluded from testing, which may slow down the deployment of DAC and make rail freight transport in this region less competitive.

Inadequate funding may be responsible for the end of DAC in Central Europe

The so-called Pioneer Trains with Digital Automatic Coupling project, which is due to hit the rails in 2026, aims to test DAC in real operating conditions, with the entire project co-funded by the European Union.

However, according to RAILTARGET, there was a sudden turnaround in funding just two weeks before the deadline for grant applications. With the European organisation CINEA, responsible for CEF2 funding, not recognising the costs of commercial operation of the test trains as eligible for co-funding, many countries have no option but to abandon the pioneering project. This will mainly affect Central Europe, as Czechia, Poland and Slovakia had to quit the project following CINEA's statement. 

Rail companies have run into two major problems. The first is an obstacle at European level, as it has been decided that the project to test the DAC in real operation will draw funding from the Connecting Europe Facility. However, the CEF2 instrument allows only 50% co-financing, so it is not an optimal choice for projects with technology that is not yet finalised. This has been demonstrated in the project to test the digital automatic coupling. DAC is a technology that is at an early stage of development, so it is not certain what model of coupling will be installed on the pioneer trains. This represents a significant risk, which CEF2 does not reflect. Nor does it take into account the potential cost to companies if testing does not prove successful in practice and the DAC has to be removed from the cars again.

According to the original plans, the project was to receive funding under R&D funds, where funding would reach 80%. If this plan was implemented, companies would have more flexibility in terms of the eligibility of the costs they would incur in switching to DAC. Related to this is the maturity level of the coupling itself, as costs are not strictly given. This is a pioneering or test project, so it is possible that some of the DAC features will not prove themselves in practice and the model will then need to be changed or the technology otherwise modified, which will be reflected in the costs.

Central European countries are at a competitive disadvantage without DAC testing

The withdrawal of Central European countries poses a threat to the future of DAC. The consortium of companies that entered the pioneer train project was unbalanced from the start, comprising both large national rail companies and small private carriers. But here is the crux of the problem, which then links to the inadequate CEF2 funding model. Large companies naturally have more employees and more capacity, including in terms of the physical assets they have at their disposal. All of this gives them an advantage over smaller firms, as authorisation and other approval processes are then within their own remit, so they do not need to hire contractors. Small carriers, on the other hand, have fewer employees, so they have no choice but to rent workshops and other facilities, and hire outside firms to handle what they cannot with their capacity. However, it was the small companies that represented Central Europe.

Czechia, Slovakia and Poland are important countries for linking all parts of the European Union and after their departure the whole region from Germany to the east is excluded. These countries are supporters of railway digitalisation and automation. At the same time, they have also understood that testing the digital automatic coupler under various conditions is the foundation of modernising freight rail transport. If this region is eliminated from testing and DAC is only tested in countries such as Germany or Austria, the harmonisation of freight transport will move backwards again. At the same time, this may also jeopardise the market in Central and Eastern Europe, which will thus have no experience with digital automatic coupling and will find it difficult to compete with Western capacities.

Lack of national funding stands in the way of DAC

The project's driving force remains the railway giants from Germany and Austria, but they have been promised national co-financing, so they do not face the risk that their numbers will fall even further into negative territory if they fail. But this does not apply to the departing states, which cannot benefit from national funding. Here we can highlight the funding problems at national level as well. Unfortunately, ministries in Central Europe prefer to invest in infrastructure, so testing the digital automatic coupler in real operation is not something for which there are funds left. In the future, it should be ensured that co-financing from national sources is also possible for technology projects.