The European Commission has approved a 1.1 billion euro German scheme to compensate operators using electric traction following a recent surge in electricity prices. The European Commission said the measure would help ensure that the rail sector remains competitive while maintaining the environmental performance of electric railways, in line with the objectives of the Commission's Sustainable and Smart Mobility Strategy and the European Green Deal.

Germany notified the EC that it intends to introduce the scheme to support freight and passenger operators to cover some of the extra electricity costs incurred as a result of the unusual increase in electricity prices following Russia's war against Ukraine. In doing so, the program aims to support and maintain a modal shift from road to rail transport using electric traction, promoting greener modes of transport.

Under the plan, assistance will take the form of monthly reductions in electricity bills for freight and passenger rail transport operators. The German government will only reimburse electricity suppliers for financial support provided to operators. The scheme will cover electricity consumed in 2023.

The EC assessed the measure against EU State aid rules and the 2008 State aid guidelines for operators and found the scheme to be conducive to the environment and mobility; necessary and appropriate; proportionate; limited to reduced use of electricity compared to road transport Competitive disadvantages faced by traction rail transport.

On this basis, the Commission approved the German plan under EU state aid rules. The measure will be administered by the Federal Ministry for Economic Affairs and Climate Action with the assistance of electricity suppliers. The national legal basis for this measure is the Electricity Price Braking Act.

The European Commission has approved on 21 December 2022 the provision of assistance to other sectors to increase electricity prices within the framework of the interim crisis on the same German legal basis. The 1.1 billion euro plan will enable Germany to support electric traction, a greener form of rail transport than diesel vehicles, said Ms Margrethe Vestager, executive vice president for competition policy. This will help Germany meet its European Green Deal targets while relieving transport operators of the burden of rising electricity costs, benefiting passengers and freight customers.Editor/XingWentao