The European Commission’s new guidelines on state aid for investment (part of the Guidelines on State Aid for Land and Multimodal Transport) introduce significant changes compared to the 2008 framework for the railway sector. While the old rules did not include provisions on infrastructure financing, the new guidelines introduce, for the first time, a set of rules on the granting of state aid for investments in this area.
The European Commission’s new guidelines, recently published in the Guidelines on State Aid for Land and Multimodal Transport, introduce clear rules on state aid for investments in railway infrastructure, marking a significant step forward from the 2008 framework. These guidelines cover the construction of new lines, the modernization or renewal of existing ones—including service facilities and private lines—and provide a framework adapted to current market realities. The aim is to support projects that increase the capacity, efficiency, and safety of rail transport, while stimulating the transition to sustainable mobility.
The new rules distinguish between state aid for investments in interoperability—essential for coordinating operators and reducing market failures—and aid intended for the technical modernization of rolling stock. In addition, support may include digital projects, such as traffic management systems, which help improve traffic flow and increase safety on the rail network.
Investments for sustainable transport
State aid for investments can be directed toward railway infrastructure either as a standalone system or integrated into multimodal solutions, including those combined with inland waterway transport or in seaports connected to railway networks. These investments enable the expansion of existing traffic, the provision of new types of services, and the maintenance of infrastructure in optimal condition, preventing a decline in services.
To be compatible with the internal market, aid must be genuinely incentive-based, meaning that support is only valid if the beneficiary applies for funding before work begins. Furthermore, the amount of aid must be proportional, limited to the project’s funding gap or the eligible costs of the investment, whichever is lower. In practice, this type of support helps reduce costs for operators, improve service quality, and foster the rapid development of sustainable rail and multimodal transport.
Public support for private rail sidings
Private rail sidings are essential for reducing road freight traffic in the first and last mile segment, facilitating multimodal transport.
State aid for investments in private rail sidings is intended to ensure their functionality and development in three main areas.
First, it can enable a site to connect to the rail network for the first time, facilitating direct rail access through new construction.
Second, the aid can increase the line’s capacity or make its operation more sustainable, for example through electrification, so that rail traffic becomes more efficient and environmentally friendly, which requires modernization work. Another perspective is that of renewal, where public support can play a role in saving lines that, without state aid, would have been abandoned. This ensures the continuity of services on these lines.
The number of private sidings, vital for sustainable multimodal transport on the first and last mile, has been steadily declining in the EU, and without adequate incentives, this trend is likely to continue.
Companies’ decisions to build, modernize, or renovate such lines are influenced by several factors, such as the volume and type of goods transported, the density of manufacturers in the region, and the level of rail infrastructure. In the absence of public aid, operators are less motivated to invest, and the market often resorts to cheaper but less sustainable solutions.
For a company, investing in a private rail line requires a careful assessment of costs and risks. While road transport may seem more economical and is supported by public authorities, the rail option involves significant expenses for construction, maintenance, and site-specific feasibility studies, in addition to a long-term commitment. The investment is also exposed to external risks, such as disruptions to connecting rail services that could affect the future use of the line.
In this context, the Commission considers that state aid for investments in private sidings is essential. Not only does it support the construction, modernization, and renewal of this infrastructure, but it also contributes to the coordination and efficiency of rail freight transport, accelerating the transition to a more sustainable and competitive logistics system.
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