Germany to spend €500m on energy efficiency technologies for rail

Germany to spend €500m on energy efficiency technologies for rail
European Commissioner Margrethe Vestager © David Fitzgerald/Web Summit via Sportsfile

German transport authorities have announced €500m in public funding to support energy efficiency technologies for rail, and companies investing in such technologies.

The new scheme to fund energy efficiency technologies for rail will begin this year, and aims to promote a shift of freight traffic from road to rail, which in turn will decrease atmospheric CO2 emissions. Rail is responsible for less pollution than road transport, and by making it more energy efficient, rail companies could decrease their emissions and widen this gap.

The European Commission has approved the provision of additional funding by the German government under its state aid rules. It argued that the scheme would be beneficial for the environment and for mobility because it will support a modal shift from road to rail for many freight deliveries, without unfairly distorting competition in the country’s rail sector.

How will Germany’s rail investment scheme work?

The government’s scheme will run from 2018 to 2022, and will compensate rail transport companies delivering electrically powered rail services for up to 50% of the expenses their incur from installing or operating energy efficiency measures. These expenses may include acquiring hybrid locomotives or other elements of modern, energy-saving rolling stock, or introducing automated solutions.

In order to qualify for the support, rail transport companies will need to demonstrate their ongoing commitment to energy efficiency, by showing a year-on-year improvement of 1.75% in their energy consumption per passenger. From 2020, this requirement will increase to a 2% year-on-year improvement in energy efficiency to qualify for the scheme.

What have European authorities said about the scheme?

European Commissioner for Competition Margrethe Vestager welcomed the introduction of the scheme, which was first proposed in January, because of the environmental benefits it would bring to the German transport sector.

She said: “Electrically powered rail transport is one of the most environmentally friendly transport options. By promoting a shift from road to rail, the German scheme will contribute to meeting the EU’s environmental and transport objectives, without distorting competition.”

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