EC approves €1.1bn German scheme to compensate rail operators using electric traction

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The European Commission (EC) has approved, under EU State aid rules, a €1.1bn German scheme to compensate rail transport operators using electric traction following the recent spike in electricity prices.

The measure will contribute to ensuring that the rail sector remains competitive while preserving the environmental performance of electric rail, in line with the objectives of the Commission’s Sustainable and Smart Mobility Strategy and of the European Green Deal.

Germany notified the EC of its intention to introduce a €1.1bn scheme to support freight and passenger rail transport operators using electric traction. The aim of the scheme is to help rail operators cover part of the additional electricity cost experienced due to the exceptional increases in electricity prices in the context of Russia's war against Ukraine.

In doing so, the scheme aims to support and preserve the modal shift from road to rail transport using electric traction, thus promoting a greener means of transport.

Under the scheme, the aid will take the form of monthly reductions in the freight and passenger rail transport operators’ electricity bills. Electricity suppliers will then be reimbursed by the German state only for the economic support provided to the rail transport operators.

The scheme will cover electricity consumed between January 1, 2023, and December 31, 2023.

“This €1.1bn scheme will enable Germany to support electric traction, which is a more environmental-friendly mode of rail transport compared to diesel-fuelled vehicles. It will help Germany meet its European Green Deal objectives, while reducing the burden of rising electricity costs for transport operators, to the benefit of passengers and freight customers,” said Margrethe Vestager, executive VP in charge of competition policy, European Commission.