THE European Commission has commenced a public consultation on a proposed revision to the 2008 Guidance on State Aid for Railway Undertakings, which the EC says it hope will make it easier for member states to support less polluting and more sustainable transport modes.

The guidelines set out the conditions under which aid to railway companies may be considered compatible with the internal market and state aid rules. The EC says state aid can help to overcome the long-standing lack of interoperability and the need for digitalisation to encourage the development of cross-border services and improve rail’s overall competitiveness, reduce emissions and facilitate modal shift.

An evaluation of the current guidelines by the EC found that the guidelines have made an important contribution to encouraging modal shift to rail and to promote interoperability. However, the EC says adjustments are necessary to reflect the latest market and regulatory developments and to enable the sector to embrace a green and digital transition in line with the objectives of the EU Green Deal.

The EC’s executive vice-president, Ms Margrethe Vestager, who is in charge of competition policy, says updating the guidelines is “a big step towards decarbonising Europe's transport sector and making rail more attractive, while limiting the competition distortions.”

The proposed revision will consider:

  • simplifying the rules on aid for coordination of transport that support the modal shift to more sustainable transport solutions
  • extending the scope of the Railway Guidelines, in particular to include all relevant transport operators in the intermodal chain, which contribute to the modal shift of freight from road to less polluting and more sustainable transport solutions
  • removing barriers to market entry or expansion of new market players, in particular as regards access to suitable rolling stock and vessels
  • ensuring the modernisation of fleets and network interoperability
  • contributing to avoid cross-subsidisation between the commercial activities and those subject to public service obligations of vertically-integrated railway companies.
  • assessing the need for rules on public transport services in all areas of rail transport that were not yet covered by the current guidelines, in particular for freight services, and
  • assessing the need for adjusted rescue and restructuring rules applicable to railway undertakings.

Responses to the questionnaire posted on the Commission’s Better Regulation Portal are possible up to March 16 2022. Adoption of the new guidelines is expected by the end of 2023.

The revisions are closely linked with an initiative launched on October 1 that would allow the EC to adopt a new block exemption regulation for railways, inland waterway, and intermodal transport, and to facilitate the granting of aid to support less polluting modes without EC scrutiny. The commission will submit a proposal to the European Council at the beginning of 2022.