The scheme, which will run until the end of 2024, will have an annual budget of €100m with the support taking the form of direct grants of between €25,000 and €30m.

Under the programme, aid will be granted to two types of projects including the development and testing of innovative technologies by means of pilot projects and digital test cases as well as the use of demonstrators, and the market introduction of innovative new technologies.

The initiative aims to encourage a modal shift from road to rail by improving digitisation and increasing the logistics capabilities and interoperability of rail freight transport to improve competitiveness.

Under guidelines for the programme published in the German Federal Gazette by the Federal Ministry of Transport and Digital Infrastructure (BMVI) on May 19, the projects involving test sites and pilot schemes will qualify for federal funding of between 50% and 100%, depending on the size of the organisation undertaking the research.

The demonstrator projects will receive between 25% and 100% of the required funding, according to the size of the organisation, while submissions covering the introduction of innovative technologies to the market will qualify for 50% federal funding.

The EC was required to investigate the programme under EU State Aid rules and found that the scheme is necessary to incentivise investments in research, development and innovation of new technologies in the rail freight sector. It decided that the measure is proportionate in view of the significant investment required for the research activities and is in line with the European Union’s environmental and transport objectives, without unduly distorting competition.