The need for a new document on state aid eligibility stems from the Fitness Check carried out by the Commission in 2020, which concluded that the current framework is obsolete. More specifically, the new ones no longer include the conditions on cancelling historic debt directly linked to the activity of rail transport and the specific conditions for restructuring freight branches of railway undertakings.

New services and interoperability

Regarding new services, financial support can be provided for a maximum of five years to purely rail or inland waterways connections. New services involving more modes of transport will not be eligible. New services also include pre-existing connections that have not been in operation for at least three years, the document specified. When it comes to rail interoperability, financial aid can be provided for ETCS, FRMCS, ATO, DAC, rolling stock adaptation to different electrical systems, different gauges and to transport intermodal loading units.

No funds for infrastructure use, some funds for sidings

The new guidelines do not include direct aid for infrastructure use, but Member States can provide support “to reduce the external costs of transport (…) to cover the costs linked to” it. This support can be applied to sustainable multimodal transport. Moreover, some infrastructure projects specific to rail freight, such as building, renewing or replacing private sidings, are now eligible for state aid. “Private sidings play a key role in reducing the need for first-/last-mile road transport for freight”, the Commission highlighted.

Who cannot apply?

Despite extending their scope, the guidelines still have thresholds assessing eligibility. For example, railway undertakings in difficulty cannot benefit from this type of state aid. These are companies losing half of their capital, under restructuring or insolvency and with large debts. State aid guidelines for them are regulated with a specific and separate document. Furthermore, aid cannot be granted for transport services on routes that have established capacity constraints that would prevent the modal shift.

Harsh reality check

Other than explaining the new state aid scheme, the EC’s documents included a few statements that finally recognised the struggles of the rail freight industry and its stagnating situation. “The Commission observes that rail freight transport services cannot always be operated on a commercial basis”, it admitted.

From inadequate rail links to terminals and the traditional fragmentation of the EU which hinders rail coordination, such schemes are now a necessity not only to increase the share of non-road modes, but also to avoid a decrease, the EC urged. Rail freight has been on a downward trajectory for a few years now in Europe, while the road seems to continue to grow.

“The Ministry of Transport expresses its deep satisfaction with this long-awaited measure, which strengthens the Alpine rail highway between Italy and France with a market-based instrument and replaces the previous model based on the monopoly of a single concessionaire, which has been at a standstill for over a year”, the Italian side commented.

The service could restart in September, according to the managing director of the Orbassano interport (SITO), Enzo Pompilio D’Alicandro. It would aim to load up to 100 trucks per direction per day. “Operators are looking with interest at this service, which makes it possible to increase the load by 15% in intermodal mode”, D’Alicandro is quoted as saying in Italian media.

New CEO Bernhard Osburg told the German press agency dpa that the company is planning to reduce the workforce by 6,200 by 2030. The current workforce consists of some 14,000 people. The measure will affect almost all areas, including train operations, dispatching, planning, administration, sales, and IT, writes Die Zeit.

Osburg had explained that DB Cargo recorded a 2025 loss equalling “a mid two-digit million amount”, meaning around the 40-60 million euro area.

The CEO said that he presented a restructuring strategy with a medium-term focus extending to 2030. Experts are expected to complete their evaluation of the plan by the end of February.

UPDATE:

The DB and DB Cargo Supervisory Boards seem to have endorsed Osburg’s restructuring plan. “DB Cargo should be able to live on its own again – and even more: we will be a rail freight operator with real European DNA”, Osburg wrote on LinkedIn.

DB Cargo’s four pillars of restructuring

Osburg wants to focus on four pillars: International markets, savings, a restructuring in SWL and corporate culture. In short, demand for rail transportation among Germany’s industries is weakening, so Osburg intends to focus on international markets instead. “We are significantly aligning sales, planning, scheduling, and production more strongly with European markets and are developing DB Cargo into the leading European rail logistics provider with clear, cross-border system solutions”, the CEO said.

In terms of cost savings, this is where the job cuts come in. DB Cargo wants to implement leaner administration and improve productivity. The restructuring in the SWL segment is also accompanied by severe job cuts of 2,000 positions. Osburg also plans to concentrate train formation operations at four main locations: Cologne-Bremberg, Seelze, Mannheim, and Nuremberg.

DB Cargo will continue to operate five additional shunting yards as flexible secondary locations. Of the current 27 maintenance depots, twelve are to be closed or sold.

In terms of corporate culture, Osburg said that he wants to stimulate responsibility among decision-makers at the operational level.

It is unclear if this plan will help DB Cargo succeed in becoming profitable by the end of 2026. The company still needs to clarify details, which it plans to do in summer. Gradual implementation will only start then. The single wagonload restructuring will continue into 2027.

The adopted regulation applies to telematics applications for both freight and passenger services, including capacity management, train preparation, traffic management and management of freight wagons and their load. In the case of passenger rail, it additionally applies to ticketing and travel information. It only applies to rail transport services operating within the EU (and therefore not when operating to or from third countries).

What are the data sharing obligations?

In terms of data sharing, the regulation obliges “telematics stakeholders” that are involved in the same rail transport services in the abovementioned processes to grant each other access to data necessary to carry out those processes. If that sounds complex, the idea is simple: companies that work together need to give each other the data needed to do so. Which data that is exactly, the Commission has specified in the annex of the regulation.

Additionally, infrastructure managers (IMs) or operators of rail freight service facilities (e.g. terminals, marshalling yards, maintenance facilities, storage sidings) are obliged to provide telematics stakeholders access to working timetable data, train traffic data, train composition data and historical records via a common EU web UI.

Upon request of an EU body or a public sector body, telematics stakeholders are also required to grant direct access to data in order to monitor the establishment of the Single European Railway Area or TEN-T, as well as the development of interoperability, safety and auditing the flow of freight or passengers in the EU.

One ‘data language’

All this data is then also supposed to be exchanged in a standardised format based on the ERA Ontology.
When sharing data, it will be mandatory for stakeholders to do so through APIs or web UIs. These could be joint EU applications, a “one-stop shop” which will be mandatory for IMs to use for multi-network capacity management, train preparation and traffic management processes.

In short, the TSI supports end-to-end digital capacity and traffic management and strengthens intermodal integration, according to the European Commission. It hopes to do so by enhancing the digital connection of multimodal freight terminals to the hinterland, extended digital tracking and tracing functions for rail freight services, support for paperless freight transport, including the use of the electronic consignment note (eCN) in line with the eFTI Regulation.

Moreover, there would be demand for hyperloop services for time-sensitive cargo transported by road. The study claims that 80% of this cargo (19% of the total long-haul trucking demand) could be shifted to hyperloop. “Based on these estimates and the expected freight transport activity (…) a fully operational EU-level hyperloop network could account for 470 Gtkm, translating to 13% of total freight demand in 2050”, the study said.

The ‘eight countries’ scenario

The study, carried out by a consortium led by Ramboll Management Consulting, TIS, CERTH, and SINTEF, also presented a scenario where only eight EU countries would get a hyperloop network. The eight countries would be Austria, Belgium, France, Germany, Italy, Luxembourg, the Netherlands and Poland. In this case, the study foresees that the hyperloop market share would set at 7% for 262 Gtkm in 2050.

This option “represents a more realistic network coverage compared to the broader EU-wide scenarios”, the study highlighted. However, a fragmented approach would raise numerous questions. Should it be funded by the EU even if it would not benefit all Member States? Should the eight national governments in question pay for it? What would the impact of leaving countries out be?

Ambitious estimates

The role of hyperloop for freight transport envisioned by the study largely relies on the assumption that the demand to move goods in Europe will continue to increase. Even for rail freight, the study is taking for granted that its market share in Europe will reach 20% of total demand. However, this might not be the case as the sector has grown in only six countries in the old Continent and the average in the EU has decreased from 18.5% to 16.9% over the past two decades.

The infrastructure is not even there yet

All these studies and estimations might paint a positive picture, even for the marginalised role that hyperloop can play for freight movements. But hyperloop needs a whole new infrastructure network which simply does not yet exist. Some of the predictions in the study talk about starting operations in 2035, which is less than 10 years away.

Considering the usual timeframes for similar sized projects in Europe, this is a very ambitious schedule to say the least, especially when considering cross-border sections. International projects always take longer to realise due to the different interests of different Member States, and it is hard to think that things would be better in the context of hyperloop deployment.

The costs

Given the problems the European rail freight industry is already facing, talking about hyperloop seems far-fetched. Many important rail routes are still non-electrified and are in desperate need of being renovated, the construction of alternative routes has been sidelined for years and operators struggle to remain alive. How could implementing a more expensive system help solve these issues?

One of the few certain things about hyperloop is in fact that it will be expensive to build, and thus expensive to use. The Commission’s study highlighted the difficulties of estimating costs in such a volatile environment, but most agree that a hyperloop network will cost around 36 million euros per kilometre. For the same amount of money, for example, the existing railway network could be significantly improved to the benefit of both rail freight and passengers.

Previous schemes cleared as well

In addition to approving the 61 million euros scheme, the Commission also analysed two previous financial injections provided to Lineas. The first one saw 46 million euros coming from Belgian regions and banks in 2024. The second one entailed 20 million euros coming from the company’s main shareholders (the Belgian government and French investment fund Argos Wityu) in 2023. “The Commission concluded that neither injection qualified as State aid”, a note from the EC said.

“By reducing freight transit time from Zambia and DRC to the sea from over a month to just one week, the Lobito Corridor is transforming how goods move across central and southern Africa”, the European Commission wrote about the corridor earlier. “It is opening markets for farmers, small businesses and industries while creating new jobs and lowering carbon emissions.”

Critical raw materials

European Commissioner for International Partnerships, Jozef Síkela, visited Zambia from 10 to 12 November to deepen the EU-Zambia partnership and promote industrial and infrastructure development along the Lobito Corridor. Síkela also discussed “cooperation on critical raw materials”, which is what much of the geopolitical rail competition in Africa is about.

Ahead of the visit, the European Commission said that the agreement would cover an investment of 116 million euros. ZNBC Today has reported that a total investment of 200 million euros was agreed upon.

Once EMERS is active, military transports would typically be entitled to rail slot allocation within six hours of the application. Importantly, the affected other users of the rail network would not be entitled to compensation. Under certain conditions, rail vehicles could also be allowed to operate outside their typical area of operation for which they received authorisation.

When it comes to the question of the rolling stock fleet, the Commission proposes to create a ‘Military Mobility Solidarity Pool.’ Member States can voluntarily register their capabilities for military transport, including both their own assets and those acquired through agreements with civilian operators. These capabilities can then be procured by Member States to fill in the gaps in military transportation.

More options for the Commission

The Commission also wants to be able to implement acts requiring railway undertakings to register its vehicles that are suitable for military transport. In consultation with ERA, it also wants to be able to formulate technical parameters to specify which vehicles are suitable for such operations.

The new proposal also stresses the need for dual-use infrastructure improvements. It requires Member States to remove bottlenecks, reinforce bridges, increase loading capacities and improve rail access to ports and terminals. Interoperability is another focal point, with the proposal mandating a prioritisation of migrations to standard gauge as well.

Lastly, the proposal pursues the harmonisation and digitalisation of customs forms. Cross-border permissions should be granted within three working days.

CER welcomes the proposal

The Community of European Railway and Infrastructure Companies (CER) has responded positively to the Commission’s proposal. “Today’s Military Mobility Package is crucial to ensure fast and seamless military movements across Europe, in which railways play a key role”, commented executive director Alberto Mazzola.

“CER calls for the swift adoption of the Package in the interests of EU defence readiness and improved continental connectivity as a whole. With a systemic approach to the railway system to facilitate military transportation, addressing infrastructure, procedures, capabilities and governance gaps in a dual-use perspective, we can deliver maximum benefits for civilian and military users alike.”

CER did highlight some points for improvement, namely the necessity for “ambitious and predictable funding” for infrastructure corridors and hotspots, estimated at 100 billion euros. It also says that the existing rolling stock fleet should be replenished before starting to pool capabilities.

The question of Nikutta’s responsibility for DB Cargo’s situation aside, the rail freight operator has unquestionably fallen into a rather challenging position throughout the past years.

How it started

The story starts on 19 April 2018. A supposedly Belgian party filed a complaint with the European Commission (EC) on alleged state aid granted to DB Cargo. The identity of the complainant is confidential.

In the following years, an information exchange took place between the complainant and the European Commission and Germany and the Commission. On 31 January 2022, the EC informed Germany that it was starting a formal investigation procedure into the state aid allegations.

The allegations of state aid

The complainant accused DB Cargo of receiving competition distorting state aid through four mechanisms. First is the profit and loss transfer agreement (PLTA) concluded in 2012 between DB Cargo and its state-owned parent company Deutsche Bahn. The agreement obliged DB Cargo to transfer any profits at the end of the year to DB, and it obliged DB to cover any losses made by DB Cargo.

In practice, the European Commission said in 2024, DB Cargo never generated a profit during the years when the PLTA was in force. “As all losses generated have been transferred, DB Cargo has been shielded from having its losses affect its balance sheet, and hence from any negative financial impact of the accumulated losses”, it explained.

Since DB is a fully state-owned company, the complainant argued that it amounted to state aid that gives DB Cargo an unfair advantage over its competitors on the market.

Besides the PLTA, the complainant also argued that the provision of intra-group service at DB amounted to state aid. Those include analytics, accounting, real estate, IT services, personnel services and training that took place at the cost of the group, not the freight operator. The third point concerned alleged advantageous financing conditions of loans provided to DB Cargo by DB Treasury. Those intra-group loans were not collateralised, because DB, as the only shareholder of DB Cargo, operated as both the equity provider and lender. “Consequently, DB Cargo has been able to sign loans without using its assets as collateral”, the EC explained in 2024.

The fourth and last accusation of state aid concerns the partial remuneration of civil-servant staff that is assigned to DB Cargo by the Federal Railway Fund. DB has only paid a part of their costs since the introduction of the system, following Germany’ railway liberalisation reform in 1994.

The decision

On 29 November 2024, the European Commission issued a conditional decision on the state aid question. It sided with Germany on issues two, three and four. On the topic of profit and loss sharing, it found that the agreement – most of the time – was a legal financial instrument in line with what a private shareholder would have done, according to the EC. As such, there was no question of illegal state aid.

That changed at the end of 2021. By that point, DB Cargo’s financial performance had deteriorated so much that a private investor would have annulled the PLTA. “In the present case, de facto operating losses in 2021 and projected results for 2022 and thereafter that would have caused a market shareholder to give to DB Cargo notice of termination of the PLTA on 30 September 2021”, argued the Commission.

“In such case and as from that moment, DB Cargo would have almost certainly been condemned to going out of business in the short or medium term, with the predictable increasing depletion of its equity base”, from that moment onwards, the PLTA effectively amounted to illegal state aid.

Germany and the EU strike a deal

The PLTA continued, because the EC only decided towards the end of 2024 that the money transferred to DB Cargo after 2021 amounted to unlawfully granted state aid. Ultimately, Germany and the Commission came to an agreement: the European Commission approved the 1,9 billion euros of state aid granted after 2021, on the condition that DB Cargo would continue implementing its restructuring plan.

Despite initially having been unlawful, the aid was found to be compatible with the EU’s restructuring guidelines, considering that it now aimed at supporting DB Cargo’s transformation.

Germany proposed a number of additional conditions for DB Cargo, on top of the obligation to implement the restructuring plan: the operator would not be allowed to acquire any shares or exceed its domestic volume of 2023 in terms of tonne-kilometres. DB Cargo would also have to sell part of its locomotive fleet and purchase block train services from external parties, among some other measures.

The restructuring period lasts until 31 December 2026, during which period Germany can provide the company with financial aid. DB Cargo is therefore on a strict deadline to improve its financial performance.

Then comes 2025

With another 357 million euro operating loss in 2024, DB Cargo headed into 2025 with a gigantic task in front of it. One of the main loss-making business segments are the single wagonload operations, which consultants reportedly proposed to eliminate altogether. Many in the rail freight industry responded furiously to that idea, because it would cut off many companies from rail transportation services.

Ultimately, DB Cargo’s path to financial success resulted in the departure of former CEO Sigrid Nikutta. Many, including trade union EVG, blamed her for the problems at the freight operator.

The restructuring plan was drawn up under her watch, but the Commission’s decision and Berlin’s additional conditions tied DB Cargo’s hands. The idea is to make the rail freight market fairer and more competitive, but it also locked the German freight operator onto a path without much room for flexibility – only the Commission can approve changes to the key elements of the restructuring plan.

Yet, ERA has not been able to meet expectations set for the agency in 2013. Notably, the Commission says, the agency’s responsibility to issue vehicle authorisations has demanded so much of its capacity that it has fallen short of delivering on other, policy-related tasks. Those include TSI development, the “cleaning up” of redundant national rules and monitoring National Safety Authorities (NSAs) and Notified Bodies (NoBos).

Due to “market trends” and “specific railway sector business decisions”, the workload for authority tasks was unexpectedly high, and so ERA prioritised those. The figure below shows how ERA’s workload for those tasks grew throughout the years, with vehicle authorisations taking up the vast majority of the demand. Despite the growing workload, ERA has managed to meet all agreed upon deadlines, says the European Commission.

As seen in the graphs, which use ERA data, the railway expects further growth in vehicle authorisations in the coming years. That has to do with the foreseen implementation of DAC and ERTMS.

The Commission also expects rapid growth in the issuance of Single Safety Certificates.

A lot of the burden for ERA comes from the freight sector. For example, 31% of all vehicle authorisation requests concern freight wagons. That is not entirely surprising, since most freight rolling stock needs to be suitable for international use. By default, ERA handles those authorisations. 95.8% of all wagon authorisation requests are for multi-country use, for locomotives that share is 48.4%.

Policy falls behind

As said, the prioritisation of authority tasks has had its drawbacks. For example, between 2019 and 2021, ERA restricted the scope of its audits of NSAs to staff competence management and supervision activities, according to the Commission. These were considered essential to get assurance on the safety levels achieved by the Member States. During the same time period, ERA audited just 23% of NoBos under the agency’s mandate.

The main factor that hindered ERA’s capacity to fulfill its tasks concerns resource limitations linked to the contribution of the EU and the establishment plan. “Since the adoption of the 4th Railway Package, ERA has faced the challenge of an establishment plan cap and limits to the capacity for recruiting of additional resources”, the Commission explains.

At the same time, some NSAs showed performance issues and “limitation in their cooperation” with ERA, which negatively impacted the work of the agency.

In spite of the challenges, the EU’s railways remain among the safest in the world, with a declining rate of accidents and fatalities, says the Commission. Rail is also still the safest mode of land transport in the EU.