Czechia: EU Commission approves €180m to support transport operators using electric traction

The European Commission has approved, under EU State aid rules, a €180 million Czech scheme to support rail and urban public transport operators using electric traction. The measure will contribute to improving the environmental performance of rail and urban transport, in line with the objectives of the Commission’s Sustainable and Smart Mobility Strategy and the European Green Deal.

The Czech measure

Czechia notified the Commission of its plans to support operators of (i) rail passenger and freight transport and (ii) urban public transport (i.e. tramway, trolleybus and cableway systems), which run their vehicles on electric traction. The scheme, which has an estimated total budget of €180 million (CZK 4.500 million), will run until the end of 2026.

The aim of the measure is to promote (i) transport by electric traction as a greener mode of transport as opposed to diesel-powered vehicles, and (ii) the shift of freight and passenger transport from road to rail and urban transport.

Under the scheme, the aid will take the form of an exemption for transport operators from the renewable energy sources fee (‘RES fee’), which is included in the electricity bills of electricity consumers and finances renewables energy generation in Czechia.

The Commission’s assessment

The Commission assessed the measure under EU State aid rules, in particular Article 93 of the Treaty on the Functioning of the European Union (‘TFEU’) on transport coordination, and the 2008 Commission Guidelines on State aid for railway undertakings (‘Railway Guidelines’).

The Commission found that:

• The scheme is beneficial for the environment and mobility, as it supports rail and urban transport using electric traction, which is less polluting than road transport and diesel traction and decreases road congestion.
• The measure is necessary and appropriate to achieve the objective pursued, namely to support the modal shift from road to rail and urban transport using electric traction.
• The scheme is proportionate, i.e. limited to the minimum necessary, as the aid remains below the maximum thresholds set out in the Railway Guidelines.
• The aid is limited to reducing the competitive disadvantages faced by rail and urban transport using electric traction compared to road transport and diesel traction. Therefore, the measure will not have undue negative effects on competition and trade in the EU.

On this basis, the Commission approved the Czech scheme under EU State aid rules.

Background

Article 93 TFEU enables Member States to support the coordination of transport, including for urban transport. The 2008 Railway Guidelines set out the conditions under which aid to railway companies may be considered compatible with the internal market and State aid rules, in particular on the basis of Article 93 TFEU.

Today’s decision follows the Commission’s approval, on 16 July 2021, of a further  €45 million Czech scheme which provides additional support in the form of direct grants to rail freight operators using electric traction (SA.62018).

The non-confidential version of the decision will be made available under the case number SA.102508 in the State aid case register on the Commission’s competition website once any confidentiality issues have been resolved. New publications of State aid decisions on the internet and in the Official Journal are listed in the Competition Weekly e-News.