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Commission approves €500 million German scheme to support research, development and innovation of rail freight transport

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The European Commission has approved under EU state aid rules a €500 million German scheme to support research, development and innovation in rail freight transport. The scheme, which will have an annual budget of €100m, will run until the end of 2024. The support will take the form direct grants. Under the scheme, aid will be granted to two types of projects, namely (i) the development and testing of innovative technologies by means of pilot projects and digital test cases, as well as the use of demonstrators, and (ii) the market introduction of innovative new technologies.

The scheme aims at encouraging the modal shift from road to rail transport, by improving digitisation and increasing the logistics capabilities and interoperability of rail freight transport, thus rendering it more competitive. The Commission considered that the scheme is necessary to incentivize investments in research, development and innovation of new technologies in the rail freight sector. It also considered that the measure is proportionate in view of the significant investment required for the research activities.

The Commission found that the measure will improve the competitiveness of European railways and foster the shift of freight traffic from road to rail, in line with the EU's environmental and transport objectives, without unduly distorting competition. On this basis, the Commission concluded that the measure is compatible with EU State aid rules, in particular Article 93 of the Treaty on the Functioning of the European Union and the 2008 Commission Guidelines on state aid for railway undertakings. The non-confidential version of the decision will be made available under the case number SA.55353 in the state aid register on the Commission's competition website once any confidentiality issues have been resolved.

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