Brussels, 2 July 2024
The European Commission has approved, under EU State aid rules, a €45 million Portuguese scheme to encourage freight traffic to shift from road to rail. The purpose of the scheme is to promote the modal shift of freight transport to rail, which is a greener mode of transport, and is in line with the objectives of the Commission’s Sustainable and Smart Mobility Strategy and of the European Green Deal.
Under the scheme, the aid will take the form of direct grants. The scheme is open to railway undertakings which are authorised by the Portuguese Mobility and Transport Agency to provide rail freight services on the existing public rail infrastructure in Portugal. The level of support reflects the external costs (i.e. environmental costs such as CO2 emissions and air pollution; as well as social-economic costs such as congestion, accidents, noise pollution) which rail transport makes it possible to avoid compared with road freight transport. The maximum annual budget amounts to €9 million, with an overall budget of €45 million over the five-year duration of the scheme. The scheme will run until 2029.
The Commission assessed the scheme under EU State aid rules, in particular under Article 93 of the Treaty on the Functioning of the European Union, and the Guidelines on State aid for railway undertakings. The Commission found that the scheme is necessary and appropriate to promote the use of rail transport, which is less polluting than road transport. Furthermore, the Commission found that the aid will have an ‘incentive effect’ as the beneficiaries must commit to reflecting the aid in offering lower prices in order to attract customers who will make the choice between rail and road transport. The Commission therefore concluded that the measure will contribute to facilitating the shift of freight transport from road to rail. Furthermore, the Commission found that the scheme is proportionate, as it is limited to the minimum necessary, and has a limited impact on competition and trade between Member States.
On this basis, the Commission approved the Portuguese scheme under EU State aid rules.
The non-confidential version of the decision will be made available under case number SA.107166 in the State aid register on the Commission’s competition website once any confidentiality issues have been resolved.