THE European Commission (EC) has approved a Forints 29bn ($US 100m) Hungarian government grant programme to encourage the development of single wagon load rail freight.

The aid is targeted at partially covering rail infrastructure costs as well as any external costs and will be open to rail companies active in the single wagon sector. It will run until December 31 2025.

The EC approved the programme under EU State Aid rules, finding that it was necessary and proportionate to promote the use of rail as a sustainable transport mode. The EC says the programme should incentivise participants that might not have done so to use single wagon rail transport, helping to shift freight from road to rail.

The Hungarian single wagon load market accounts for 10-12 million tonnes annually, around a fifth of the total rail freight market in the country.