The European Commission has adopted guidelines for State aid to railway undertakings. The guidelines clarify the rules governing public funding of these businesses. This is one way the Commission is boosting the liberalisation of the industry and ensuring that public funding contributes to sustainable mobility in Europe.

Guidelines

These guidelines are intended to give guidance on the compatibility of State aid to railway undertakings with the EC Treaty. A safe and clean mode of transport, rail is also an industry that is undergoing liberalisation; facing tough competition from other transport modes, it is presenting some specific challenges as well in the context of EU State aid law. With this document, which pays due account to the specific features of rail while ensuring convergence of the sectoral rules with the general rules on State aid, the Commission wants to help promote the liberalisation of the sector, improving its competitiveness and capitalising on its strengths, especially from the environmental angle. The guidelines complement the 'PSO Regulation', which deals in particular with aid in the form of compensation for discharging public service obligations.

The text that has been adopted will make it possible for the European Railway Agency to grant regional aid for the purchase and renewal of passenger rolling stock. It will be possible to put such aid towards the modernisation of rail transport, which is urgently required, especially in the new Member States, both in the passengers' interest and in that of 'greener mobility'. Wishing to promote sustainable mobility, the Commission is also extending this approach to public transport by road and says it will look into the possibility of giving specific support to the least polluting technologies.

The guidelines also specify the conditions for applying Article 73 of the EC Treaty, which provides that aid which meets the needs of coordination of transport is compatible with the common market. It will be possible to apply that article directly for authorising certain State aid once the PSO Regulation has entered into force in 2009. In the interests of transparency and legal certainty, the Commission is thus presenting the methodology it will be using to assess the compatibility of aid intended to iron out differences in infrastructure costs or external costs of:

• Other transport modes.
• To promote interoperability.
• To improve safety.
• To reduce noise.
• To encourage research.

What is European Railway Agency?

The construction of a safe, modern integrated railway network is one of the EU’s major priorities. Economic integration and rapid growth in trade have transformed the European Union’s transport needs. In order to service this integrated market, railways must become more competitive and offer high-quality, end-to-end services without being restricted by national borders.

The European Railway Agency was set up to help create this integrated railway area by reinforcing safety and interoperability. Its main task is to develop economically viable common technical standards and approaches to safety, working closely with railway sector stakeholders, national authorities and other concerned parties, as well as with the European institutions.