State aid: European Commission approves a new Danish scheme in the field of rail freight transport

On 11 July 2017, the European Commission approved a Danish scheme to support rail freight operators’ investment in new on-board traffic management equipment, in order to improve the interoperability of railway systems in the European Union in the context of the European Rail Traffic Management System.

The Commission has found that the aid granted by Denmark is necessary to achieve the objective of promoting interoperability of railway systems in the EU, in line with the Directive on the interoperability of the rail system within the European Union; moreover, according with EU state aid rules, the aid has been considered proportionate.

The European Rail Traffic Management System (ERTMS) is a signalling system which aims to replace the different national train control and command systems currently used in Europe, creating a seamless European railway system and increasing the safety and competitiveness of the European rail sector.

Between 2018 and 2023, all regional and long-distance rail tracks operated by the Danish State will gradually be converted to the European Rail Traffic Management System. The conversion to this system entails significant transition costs for rail operators, including rail freight operators, who will have to invest in new on-board equipment compatible with the system. The Danish regime aims at supporting the cost for rail freight operators of investing in this new equipment.

The aid granted takes the form of direct grants that will be used for fitting the new equipment in new locomotives. The total budget is around 7.4 million euro and will be allocated to new operators and to operators already present on the Danish rail network.


Davide Scavuzzo