Competition Policy Studies

State aid in the railway sector published by DG COMP

DG COMP of the European Commission has published a study conducted by a consortium led by E.CA Economics on State aid in the field of rail transport. The results of the study support the Commission in the revision of the current Community Guidelines on State aid for railway undertakings. The consortium included E.CA Economics, LEAR, Sheppard Mullin, UEA and the Institute for Transport Studies at the University of Leeds.

In the context of the European Green Deal, the European Union aims at doubling rail freight traffic by 2050. The revision of the current Railway Guidelines is aimed at supporting this ambitious goal. It provides detailed market information, based on desk research and data collection.

The low modal share of rail (only 8.8% of total freight transport) endangers important goals in environmental and transport policy.

Compared to highly polluting road transport by truck, rail freight is a safe and low-emission type of transport. A substantial rise in the rail modal share will require improvements at three different levels of the overall rail freight system.


More, better and modern infrastructure

As of now, bottlenecks in rail network lead to congestion and slow and unreliable delivery times; outdated infrastructure makes cross-border transport tedious; facilities like intermodal terminals with outdated technology increase transport times and costs; private sidings are often missing to connect customers to the rail network.


More and up-to-date rolling stock

The existing fleet of rolling stock will not suffice for a substantial increase of the rail modal share. Furthermore, a significant share of the rolling stock is outdated and not fit for future requirements, such as automated coupling etc.


Rail freight must become competitive with road transport

Rail freight is in close competition with road transport, especially in combined transport and single-wagon transport. Only if it’s overall cheaper, shippers will choose rail transport instead of road transport. At the moment, rail freight is not competitive in many cases – as the low modal share proves.

Public policies can improve this situation with a modern State aid framework that encourages the modal share.

The study provides data on the rail freight market, such as the costs and revenues associated with rail freight. It alsoprovides policy options, including examples of good practices, for the design of State aid for rail freight which can support and guide the revision of the Railway Guidelines.



If you want to get more insights and results please contact our experts.

Download policy briefing
Download full study