The EESC is not asking only for more CEF funds for transport, they also want to boost the ones for energy projects. Currently, the EU has allocated 51,5 million euros for the former and 29,9 million euros for the latter. The EESC is recommending to increase them to 63,3 and 36,7 million euros respectively. It needs to be mentioned that the 2028-2034 CEF funds for transport were already doubled from 25,8 to 51,5 billion euros last July.

Expand beyond the EU

One of the other recommendations made by the EESC is that the funds should be extended to projects beyond the EU “through the expansion of TEN-T corridors to candidate countries.” The Committee is also urging the EU not to get hyper-focused on cross-border projects. “While this direction is desirable in itself, investments implemented within a single Member State should not be entirely excluded”, it stated.

‘Fill the gaps’

Another pledge made by the EESC is to improve the eligibility criteria for the CEF funds, which are currently absent. Since large-scale improvement projects are more common in larger Member States, they might have an advantage in how the funds are spread out. According to the committee, however, more attention should be paid to those areas where the infrastructure gap is wider, especially across the TEN-T corridors.

The Committee also highlighted how funding decisions are often made at the very last moment, right before the construction phase. “It is perceived too late and this can result in the cancellation of the project, if a co-financing decision is not secured”, the EESC pointed out. In fact, most of the projects applying for these funds usually don’t get any money, as the recently published first-ever CEF report revealed.

One final point raised by the EESC is that projects need to be entirely covered by the CEF mechanism. “Splitting a project prolongs its implementation and may even result in the part of the project that does not have secured financing not being completed”. In other words, if a project got funds from a previous CEF package but is still ongoing, financing should continue even if criteria are no longer met.

Stronger connection to Ukraine

This last one is particularly important for connecting Ukraine to the rest of Europe via rail. Čierna nad Tisou is just a few kilometres from Chop, which is where Ukraine opened its newest standard gauge railway, leading to Uzhhorod. Creating solid standard gauge connections to Ukraine has been a prerogative for both Kyiv and the EU since the beginning of the Russian invasion.

Other than the newly opened Chop-Uzhhorod line, Ukraine has recently announced an investment of over 73 million euros for the Lviv-Mostyska line, leading into Poland. These projects aim at bringing Ukraine and Ukrainians closer to the EU but also have a defence purpose. A strong railway network will allow for an easier EU deployment of military equipment and personnel.

11 million euros for ETCS

The CEF funds assigned to Slovakia also include the installation of the European Train Control System (ETCS). For this purpose, 11 million euros were allocated for both passenger and freight trains, said the Slovakia national railway group ZSSK. “Step by step – the modernisation of the railway is progressing”, the company stated on LinkedIn.

The report covers the 2021-2024 period and can be considered as a halfway report, since this CEF round will last until 2027 with 33,7 billion euros. CEF allocates funds for projects in the transport, energy and digital sectors. CEF Transport got the largest slice of the pie with 25,8 billion euros in total. Between 2021 and 2023, 21,5 billion euros have already been unlocked. Rail is the main beneficiary, obtaining 15,3 billion euros.

CEF Transport: most projects don’t make it

Despite the massive mobilisation of funds and the undeniable importance of a mechanism such as CEF, it is worth to note that the majority of the proposals were not accepted. As the report from the Commission highlighted, 631 out of 1,454 eligible proposals were accepted, a little over 43%. The requests for funds followed a similar trend, with 56,8 billion euros requested and 21,5 billion euros allocated (37,9%).

The CEF Transport package is divided into four categories: general, cohesion, Alternative Fuels Infrastructure Facility (AFIF) and military mobility. Most of the requests came from the general category: 909 submitted and 299 accepted with 9,5 billion euros allocated in face of the 30,7 billion requested. Projects under the cohesion label received a similar amount, nine billion euros (19,6 requested), but for less than half the number of projects (109 accepted out of 214 submitted).

The two final categories, AFIF and military mobility, received smaller portions but the rejection rate and discrepancies between requests and allocation were less outstanding. AFIF received 1,7 billion euros out of the two requested, financing 167 projects out of the 191 proposed. Military mobility was assigned 1,7 billion euros despite requests for five billion euros. Many projects were rejected in this case, with only 95 out of 186 being accepted.

CEF Energy and CEF Digital

The CEF funds for energy projects are divided into two groups: energy infrastructure projects (PCI) and cross-border cooperation in renewable energy (CB RES). Between 2021 and 2024, 21 PCI proposals were accepted out of 121 requests, with 3,5 billion euros allocated out of 7 requested. For CB RED, 14 out of 18 projects were admitted for 91 million euros (118 requested). For CEF Digital, 128 proposals were accepted after 184 requests were submitted between 2021 and 2023, with 684 million euros allocated of the two billion requested.

International connectivity at the core

After fears of losing the CEF mechanism altogether, this move seems to underline a change of mindset. More money for railway projects is a strategy more in line with the EU’s decarbonisation policies. “Between 2028 and 2034, we absolutely must complete the cross-border sections of the TEN-T network”, Tzitzikostas claimed.

More funds to military mobility, on the other hand, echo the current geopolitical situation and the EU’s intention to rearm itself. “We are already working closely with the military community to ensure we have a solid pipeline of projects ready for 2028”, the transport commissioner added, pointing out the importance of cross-border projects.

The CEF III package is part of the new EU’s Multiannual Financial Framework for 2028-2034, which could see a record budget of two trillion euros. Usually, most of the CEF funds for transport go to rail projects, but a lot of the resources have been allocated to a relatively small number of initiatives, as think tank T&E recently criticised.

The European Commission is planning a sweeping overhaul of how the EU allocates its long-term budget to sharpen industrial competitiveness, and while many sector-specific funds may soon be rolled into a new catch-all investment mechanism, there’s some good news for rail: the Connecting Europe Facility (CEF) — the bloc’s dedicated transport infrastructure fund — appears to have survived.

According to the draft legislation, leaked to Euractiv and Politico, the Commission wants to merge up to 14 existing programmes into a single, strategic funding vehicle called the European Competitiveness Fund (ECF). This new instrument will become the centrepiece of the EU’s next seven-year Multiannual Financial Framework (MFF) covering 2028–2034 — a trillion-euro spending plan that shapes everything from research and defence to digital infrastructure.

Under earlier proposals, CEF was at serious risk of being scrapped and absorbed into this new umbrella fund. That would have marked a major setback for EU rail, forcing transport projects to compete directly with start-ups, clean tech, and defence initiatives under a more nationally focused system. But the leaked draft confirms that CEF Transport — unlike CEF Digital — will continue as a standalone funding stream, preserving the long-term, cross-border logic that has underpinned European rail megaprojects like Rail Baltica, the Lyon–Turin base tunnel, and the ERTMS digital signalling rollout.

Still, the reprieve comes with conditions. According to the draft regulation, the future of European transport spending will be increasingly framed through the lens of military mobility, with rail expected to play a critical role in linking civilian and defence needs across borders.

CEF survives EU axe

Earlier this year, internal discussions within the Commission pointed to a serious possibility that CEF — including its core transport pillar — might be dissolved and repackaged within the ECF as part of a broader simplification drive. The idea was to streamline funding access with a “single rulebook” and maximise investment impact through strategic pooling of EU and national resources, which is what has happened to many other EU sector-specific funding mechanisms.

But that would have sacrificed one of Europe’s most effective tools for building a connected cross-border rail network. Without dedicated, centrally managed funding, they argued, multi-country rail projects could fall victim to diverging national priorities and fragmented planning. CEF, after all, directed 5.7 billion euros to rail in 2023 alone — 80 % of its total transport envelope that year, with much of the funding going to multi-national projects.

A coordinated campaign by member states, rail manufacturers, and European lawmakers followed. Eleven of Europe’s national leaders even urged Commission President Ursula von der Leyen to retain a “robust, centrally managed CEF” in a joint letter — a sign of just how seriously the warnings were taken. UNIFE, representing Europe’s rail supply industry, described the fund’s potential removal as an existential threat to the rail sector.

The leaked text now confirms a shift in Brussels’ thinking. “A strong connection between the European Competitiveness Fund (ECF) and the modernised Connecting Europe Facility (CEF) is crucial,” the draft states. It highlights cross-border infrastructure in “energy, transport, and military mobility” as essential to European competitiveness, security, and strategic autonomy. Synergies between CEF-supported projects and the new ECF are to be “ensured.”

While CEF Digital will be fully integrated into the ECF framework, the Transport and Energy strands will remain largely intact. That distinction matters: it means continued legal and operational clarity for rail infrastructure planners. However, amid major geopolitical shifts, the new budget strategy also marks a big change in how Brussels is set to justify its infrastructure spending, particularly for rail.

Military mobility: the rail opportunity no one can ignore

Military mobility — which not too long ago was a far more niche policy issue — is now a central pillar of EU budget strategy. The draft legislation repeatedly references the need to support “military movements and access to military mobility capabilities,” including through dual-use infrastructure, pooling of logistics assets, and stronger transport networks that can serve both civilian and defence purposes.

This policy shift comes as EU leaders face mounting pressure to boost defence spending — particularly in anticipation of a possible second Trump presidency in the US, which could upend NATO commitments and force Europe to take on more military responsibility. With many EU states already stretched on infrastructure budgets, aligning transport investment with defence goals offers a politically feasible way to fund both.

The ECF’s structure reflects this convergence. Its four “policy windows” prioritise defence and security alongside AI, digital, clean tech, and biotech — a group of sectors now seen being promoted as vital for Europe’s competitiveness and sovereignty. Rail, as a high-capacity, cross-border transport mode, is likely to benefit — but increasingly under the logic of readiness and resilience, not just climate and connectivity.

]]> https://www.railfreight.com/policy/2025/07/10/cef-transport-fund-saved-in-eus-new-budget-but-with-ever-stronger-emphasis-on-military-mobility/feed/ 0 https://www.railfreight.com/policy/2025/07/04/new-cef-funds-assigned-whats-in-it-for-rail-freight/ https://www.railfreight.com/policy/2025/07/04/new-cef-funds-assigned-whats-in-it-for-rail-freight/#respond Fri, 04 Jul 2025 07:58:33 +0000 https://www.railfreight.com/?p=63813 The European Union is going to distribute roughly 2,8 billion euros among 94 transport projects through the Connecting Europe Facility (CEF). The rail sector is receiving around 77% of the total funds, with a strong focus on the deployment of the European Train Control System (ETCS) both on-board and trackside. The rail freight sector will receive over 87 million euros for ETCS implementation on locomotives.
Both operators and locomotive lessors are included in the list of beneficiaries. The largest slice of the pie, 18 million euros, will go to Austrian ÖBB to upgrade Taurus locomotives, deployed both for freight and passenger services, which will be equipped with ETCS Level 2 Baseline 3.6. Czech incumbent ČD Cargo comes in second, with two investment plans totalling 15,96 million euros for the installation of ETCS Level 2 Baseline 3.

The third largest receiver of funds in this context will be DB Cargo, which will get funds through three instalments for a total of over 12,8 million euros: 5,66 million euros to equip BR193 locomotives with ETCS Baseline 2; 4,29 million euros to upgrade the ETCS on BR187 locomotives; and 1,8 million euros to retrofit type 6400 locomotives, used in Belgium and the Netherlands. Other operators receiving funds from this CEF session are Slovakian state-owned ŽSSK with 5,58 million euros and Austrian private operator Wiener Lokalbahnen Cargo with 2,19 million.

Over 33 million euros for lessors

In the rolling stock leasing market, five companies will receive financial support for the deployment of ETCS Baseline 3. European Locomotive Leasing, present in Germany and Austria, will receive 2,75 million euros to upgrade 50 locomotives. Moreover, French lessor Akiem will receive 3,41 million euros to upgrade seven series of locomotives.

In addition, Beacon Rail, based in London but leasing all over Europe, will receive 10,54 million euros for ETCS deployment on the 109 locomotives it acquired from Lineas a couple of years ago. Siemens Mobility is also getting 8,41 million euros for the ETCS upgrade on Vectron locomotives, while Railpool will receive 8,58 million for the deployment of the technology on their vehicles.

Infrastructure upgrades

A few important rail freight arteries (or future arteries) are also receiving significant funds for various modernisation projects in eastern Europe, spanning from electrification to ETCS trackside deployment. One of the major beneficiaries is Rail Baltica, which was assigned 295,5 million euros for unspecified projects in the Baltics and another 294 million for improving the Knyszyn – Osowiec line in Poland, which will connect the country to the new infrastructure.

Remaining in Poland, one of the most important rail projects, the CPK line, will get 18,35 million euros for studies for a high-speed line between Mikołów and the border with Czechia. Furthermore, 33 million euros for the electrification of the Iasi – Ungheni line between Romania and Moldova. Another line in Romania, the Ploiesti – Buzau – Focsani, will be modernised with 45 million euros destined to the country’s infrastructure manager.

A few investments also concern railways in Ukraine. Most notably, 76 million euros will be allocated to the upgrade of the railway line between the Poland/Ukraine border crossing in Mostyska and Lviv. Moreover, 32,15 million euros will go to the preparations for the upgrade of the Košice Čierna nad Tisou, improving connectivity between Slovakia’s second largest city and Ukraine.

ETCS trackside projects highlight usual issues

Other infrastructure upgrades concern the trackside installation of ETCS. Austria will receive 44,6 million for ETCS Level 2 Baseline 3 along 500 kilometres of rail network. In Poland, 534 kilometres of double track railway will be equipped with ETCS Level 1 Limited Supervision Baseline 3 with over 94 million euros coming from the CEF funds. Another important project for rail freight, the Divaca – Koper line in Slovenia, will be equipped with ETCS Level 1 and electronic interlockings with 2,29 million euros.

Other projects

There are other important projects which will receive funds from CEF. Rail Net Europe is seeing 45 million euros coming its way to distribute to infrastructure managers to “to upgrade legacy systems, develop common telematics reference files, and promote the finalisation and updates of all central systems”.

Moreover, the document did not forget about one of the most debated rail freight project in Europe: the Digital Automatic Coupling (DAC). Almost 25 million euros will be allocated to the Swedish infrastructure manager Trafikverket for “study on a large-scale testing” of DAC. Finally, funds are also going to sector associations. For example, UIRR will benefit from almost 2,5 million euros for studies and support for companies for TSI implementation.

The future of CEF III remains quite uncertain, as the European Commission is considering terminating it to put more focus on national single plans. On the other hand, the European Parliament recently published a report which highlights the importance of maintaining the fund scheme in place.

Five demands from the four projects

The four cross-border projects came forward with five demands for the European Parliament and Commission. These include the preservation of CEF III with increased financial ambition; the prioritisation of European Transport Corridors; ensuring long-term financing for cross-border projects; easing the administrative burden and encouraging cooperation between the public sector and private entities.

They are calling for “a unified and well-funded European transport network by ensuring that the next Multiannual Financial Framework provides the financial foundation necessary for the completion of these vital projects.” Similar claims have already been made by other industry players such as UNIFE, which groups rail manufacturers and suppliers in Europe. What the future holds for CEF III is still undecided, but various segments of the industry have already spoken their minds.

For freight operations, the financial aid includes repairs to old tracks, a relocation of wagon inspections, the reconstruction of an intermodal terminal and new equipment such as cranes. In 2022, the EIB transferred 100 million euros to Ukraine as part of the same support package, totalling 150 million euros.

Long-standing partner

“The EIB has been a long-standing partner of Ukrainian Railways – from well before the very first days of the war. With this new support, we are continuing to strengthen Ukraine’s railway infrastructure at a critical time”, EIB vice-president Teresa Czerwińska, who oversees EIB’s operations in Ukraine, said. “Upgrading border crossing points and key rail links will help remove bottlenecks, accelerate the flow of goods and support Ukraine’s deeper integration with the European Union.”

The project has been christened East-West Connections. The majority of the funds, 85 per cent, will be financed through the Connecting Europe Facility – Transport. The remaining 1.6 million and change will be invested by BMF Port Burgas, the private company operating the port. “With our joint efforts, we will achieve economic growth and strategic strengthening of Burgas as a key transport hub on the world map”, said Angel Zabutorov, Deputy Minister of Transport and Communications.

The port of Burgas

The port of Burgas has a strategic location on the Black Sea. It is part of the Baltic Sea – Black Sea – Aegean Sea TEN-T corridor, stretching from Athens, in Greece, to Helsinki, in Finland. Moreover, the Bulgarian port is a strategic node for trade between Europe and Asia via the Middle Corridor, as it is connected to the Georgian port of Poti on the opposite side of the Black Sea.

The East-West Connections initiative is not the only one aimed at boosting rail freight at the port of Burgas. Between 2022 and the beginning of 2025, the rebirth28 project was implemented, which included a 630-metre railway in the Burgas West terminal and a new deep water berth to accommodate bigger ships. The rebirth 28 project was also funded by European funds via CINEA, who invested almost 40 million euros.

RailFreight Summit

The synergies between rail and ports will be one of the main highlights at the RailFreight Summit, taking place in Gdansk, Poland on 8 and 9 April 2025. Sessions will include panels with port authorities and terminal operators. You can find out more about the programme here and get your ticket here.

The 22-kilometre Chop – Uzhhorod line is the first major rail project to connect Ukraine to Europe’s standard gauge network. The connection to Chop provides some flexibility in terms of rail logistics with Europe. The town is an important rail node on the Slovak and Hungarian borders, from where trains can travel in various directions. However, it is not the first or only planned standard gauge line in Ukraine, or even in Uzhhorod.

Other projects

Another project involving the city concerns the design for the construction of an electrified 1435-millimetre rail line. It would cross between Uzhhorod and Maťovské Vojkovce in Slovakia. Moreover, Ukraine plans to connect the city of Lviv to Poland via a standard gauge railway, and an existing line to Kovel will get overhead lines. Those projects can also count on extensive CEF support, running into the tens of millions.

“We are grateful to the European Commission for the extraordinary support of Ukraine, in particular in the field of transport and recovery”, prime minister Kuleba commenced. “It is important that both Ukraine and the European Union benefit from joint projects and initiatives.”