State aid for railway companies

SUMMARY OF:

Commission Guidelines on State aid for railway undertakings

Article 93 TFEU – transport coordination

WHAT IS THE AIM OF THESE GUIDELINES?

These European Commission guidelines clarify the rules set out in EU treaties for the public funding of railway companies and provide guidance on the compatibility of state aid for railway companies with the EU treaties.

KEY POINTS

EU state aid rules

• State aid which distorts or threatens to distort competition within the EU’s single market is prohibited (Article 107.1 TFEU).
• However there are exceptions for state aid which promotes the economic development of the EU in general (Article 107.3 TFEU).
• State aid is also compatible with the treaties if it meets the needs of transport coordination or if it represents reimbursement for carrying out certain public service obligations (Article 93 TFEU).

Scope

The guidelines apply to railway companies as well as to urban, suburban or regional passenger transport companies with regard to aid for the purchase and renewal of rolling stock.

Support measures

The guidelines cover several types of support measures:

• 1.

  Support by means of infrastructure funding

  • This may constitute state aid if it allows companies to benefit indirectly from an advantage by reducing their costs.
  • It will not be considered state aid if the use of the publicly financed infrastructure is open to all potential users in a fair and non-discriminatory manner, and access to that infrastructure is charged for at a rate in accordance with EU legislation.
  • Even if such financing is considered aid, it may be authorised if the infrastructure in question meets the needs of transport coordination.

• 2.

  Aid for the purchase and renewal of rolling stock

This type of support is assessed according to the common-interest objective to which the aid is contributing. Rules are defined for the following aid categories:

• aid for coordination of transport;
• aid for restructuring railway undertakings in difficulty;
• aid to small and medium-sized enterprises;
• aid for environmental protection;
• aid relating to public service obligations and regional aid.

• 3.

  Debt cancellation by states with a view to the financial restructuring of railway undertakings

Under certain conditions, debt cancellation may be considered as aid compatible with the single market if it seeks to ease the transition towards an open railway market, without unduly distorting competition and trade between EU countries.

• 4.

  Aid for restructuring railway undertakings

The compatibility of state aid for restructuring firms in difficulty in the railway industry is assessed on the basis of the 2014 guidelines on aid for restructuring.

• 5.

  Aid for coordination of transport

The intervention by public authorities aimed at guiding the development of the transport sector in the common interest may take several forms:

• aid for infrastructure use;
• aid for reducing external costs designed to encourage a shift from road to rail;
• aid for promoting interoperability, and, as far as it meets the needs of transport coordination, aid for promoting greater safety, the removal of technical barriers and the reduction of noise pollution;
• aid for research and development in response to the needs of transport coordination.

The guidelines set out in detail the method to determine eligible costs, as well as the conditions that would allow this aid to meet the conditions of compatibility mentioned in the treaties.

• 6.

  State guarantees for railway companies

The rules applicable to state aid in the form of guarantees, including in the rail transport field, are set out in the Commission notice on the application of Articles 87 and 88 of the EC Treaty (now Articles 107 and 108 TFEU).

BACKGROUND

• ‘State aid control’ on the European Commission's website

MAIN DOCUMENTS

Communication from the Commission — Community guidelines on State aid for railway undertakings (OJ C 184, 22.7.2008, pp. 13–31)

Consolidated version of the Treaty on the Functioning of the European Union - Part three - Union policies and internal actions – Title VI – Transport – Article 93 (ex Article 73 TEC) (OJ C 202, 7.6.2016, p. 86)

last update 10.11.2016