Commission approves amendment and prolongation of German state aid scheme to promote rail transport interoperability

The European Commission has approved, under EU state aid rules, the prolongation and amendment to a German scheme to upgrade traffic management equipment for rail vehicles in the area of Stuttgart in Germany.

The scheme consists of two measures and was originally approved by the Commission on 12 January 2021, it is due to expire on 31 December 2025. The first measure supports the furnishing of railway vehicles with the  European Rail Traffic Management System (ERTMS), a safety system that ensures the compliance by trains with speed restrictions and signaling‑status. The second measure supports the furnishing of railway vehicles with automatic train operation (ATO), an operational safety enhancement device used to help automate the operation of trains.

Germany notified the Commission of its intention to: (i) extend the scheme’s duration until 31 December 2029; and (ii) increase the budget by €282 million, bringing the total budget to €482 million.

The Commission assessed the amended scheme under EU state aid rules, in particular Article 93 of the Treaty on the Functioning of the European Union (‘TFEU’) on transport co-ordination, and the 2008 Commission Guidelines on state aid for railway undertakings. It found that the amended scheme continues to be appropriate and necessary to promote interoperability of railway systems in the EU and support the shift of freight transport from road to rail, which is less polluting than road transport, while also decreasing road congestion. The Commission also found that the scheme remains proportionate as it is limited to the minimum necessary and has a limited impact on competition and trade between member states. Finally, the Commission found that the aid will have an “incentive effect” as the owners or operators of railway vehicles would not perform the relevant upgrades in the absence of public support. On this basis, the Commission approved the amendment under EU State aid rules.

The non-confidential version of the decision will be made available under the number SA.116931 in the state aid register on the Commission’s competition website once any confidentiality issues have been resolved.

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