GERMANY: A government scheme to provide grants to encourage modal shift of road freight to more sustainable rail transport has been approved by the European Commission under EU state aid rules.

The scheme will provide direct grants totalling €1·7bn over five years to help rail operators cover part of the cost of operating wagonload services, or short block trains of up to 15 wagons on routes up to 300 km, which do not benefit from the economies of scale of long-distance trainload services.

The Commission found that the scheme was beneficial for the environment and mobility, necessary and appropriate to achieve the objective, remains below thresholds set out in 2008 guidelines on state aid for railway undertakings, and would not have undue negative effects on competition and trade in the EU.

‘This €1·7bn scheme will enable Germany to support important segments of rail freight transport, which is a more environmental-friendly mode of freight transport compared to road’, said Margrethe Vestager, Commission Executive Vice-President in charge of competition policy, on May 21. ‘It will help Germany meet its Green Deal objectives, while reducing the burden of rising costs for transport operators, to the benefit of industrial freight customers.’