Political environment
Regulatory and transport policy topics
Implementation of measures from the climate Action program 2030
On the basis of the Federal Government’s Climate Action Program 2030, additional Federal funds totaling € 11 billion will be made available by 2030 to strengthen the rail system. At the end of January 2020, the BMF and BMVI as well as DB AG, DB Netz AG, DB Station&Service AG and DB Energie GmbH agreed in a memorandum of understanding on the inflow and use of the funds. The funds will be used exclusively for infrastructure; half of it will be paid as equity (to increase the equity of DB Netz AG and DB Station&Service AG) and half as grants. In terms of content, the funds will be used in the categories of robust network, digital rail, attractive railway stations and economically self-reliant infrastructure measures.
The funds to be made available as an equity increase are still subject to consultation with the European Commission under state aid law. The payment of all funds until 2030 is subject to the decision of the budgetary legislator.
Other key measures of the Climate Action Program 2030 relating to rail and public transport have also been set out in concrete terms or implemented:
- On January 1, 2020, the reduction in VAT from 19% to 7% for long-distance tickets came into effect. DB Long-Distance passes this reduction on in full to its customers.
- At the beginning of 2020, the German Parliament and the Bundesrat (Upper House of Parliament) resolved to amend the Regionalization Act (Regionalisierungsgesetz; RegG) in order to increase regionalization funds of the states for regional rail transport. As a result, the € 8.8 billion planned for 2020 which will be increased by 1.8% per year by 2031, will be increased further: in 2020, 2021 and 2023 by an additional € 150 million (cumulative). Since this raise will also be increased at 1.8% per year, this will result in a total increase of € 5.2 billion between 2020 and 2031.
- At the same time, the German Parliament and the Bundesrat (Upper House of Parliament) have also increased funding for the construction and expansion of rail-linked local public transport (primarily underground trains, metro (S-Bahn) and trams). The Federal funds from the Municipal Transport Financing Act (Gemeindeverkehrsfinanzierungsgesetz; GVFG) will increase from € 332 million to € 665 million in 2020, to € 1 billion from 2021. A further increase is planned in 2025 to € 2 billion. From 2026, this amount will be increased by 1.8% per year, in the same way as the RegG. In addition, more types of projects are eligible for funding than before, and the Federal Government will assume a higher proportion of financing for each of the funded GVFG projects.
Economic Stimulus package of the Federal Government
On June 3, 2020, the Coalition Committee agreed on comprehensive measures in relation to the topic of “Tackling the Covid-19 Impact, Securing Prosperity, Strengthening Readiness for the Future.” These include a number of general relief measures for the German economy, while simultaneously providing industry-specific stimuli. The measures are divided into a stimulus/crisis-management package, a more wide-reaching package for the future, and measures based upon European and international responsibilities. Some of these measures have already been implemented. The temporary reduction of VAT from 19% to 16% or from 7% to 5% until December 31, 2020, which is significant for rail and for DB Group, came into effect on July 1, 2020, along with a number of other tax relief measures. The Act on Accompanying Measures for the Implementation of the Economic Stimulus and Crisis Management Package implements the additional, one-off increase of € 2.5 billion in regionalization funds in 2020 and the possibility of reducing the Renewable Energy Sources Act (EEG) levy to 6.5 ct/kWh in 2021 and 6 ct/kWh in 2022 through compensation payments. The second supplementary budget for 2020 includes an equity measure at DB AG in order to compensate for damages resulting from the Covid-19 pandemic and additional subsidies for interference-proof GSM-R terminals so as to improve mobile phone reception along the tracks. The funding initiative to increase the attractiveness and accessibility of railway stations was increased by € 40 million for 2020 as part of the parliamentary procedure. Other parts of the package also aim to strengthen public transport, for example by giving priority to contracts and investments worth € 10 billion, by boosting the “Smart City” program for sustainable and integrated urban development, by temporarily simplifying procurement law in order to speed up the implementation of public investment support measures, and through the announcement that the EU Presidency will be used to speed up planning regulations through the reintroduction of statutes of repose. These and other measures will now be set out in concrete terms by the specialist government departments.
National platform future of mobility
The National Platform Future of Mobility (NPM), which was established by the Federal Government, aims to maintain competitive companies and jobs in Germany and to ensure viable, affordable, needs-based, climate-friendly and sustainable mobility. DB Group is represented in the steering committee and in the working groups Climate Protection in Transport and Digitalization for the Mobility Sector. The Climate Protection in Transport working group has devised ways of achieving climate objectives for 2030 in the transport sector, several aspects of which are touched upon in the Climate Action Program 2030. Reports commissioned by the Federal Ministry of the Environment, Nature Conservation and Nuclear Safety (BMU) and by the German Environment Agency (Umweltbundesamt) as well as by the BMWi published in March 2020 show that the measures taken to date to achieve the climate protection targets for 2030 are making important contributions, particularly in the transport sector, but are not yet sufficient. The NPM will therefore continue to be closely involved in monitoring the implementation of, and further developing, these measures.
Rail pact by the Rail Future Alliance
On June 30, 2020, the second Rail Summit took place at the BMVI. Federal Minister Andreas Scheuer, the Federal Government representative for rail transport, Enak Ferlemann, and representatives of the rail industry signed a pact designed to strengthen the rail sector, and presented the Master Plan for Rail Transport along with a target schedule for Germany in sync (Deutschland-Takt). The Master Plan is the result of the Rail Future Alliance, as part of which Federal ministry and industry representatives have, over the course of the past two years and in six working groups, examined key challenges in the rail sector and developed a concept for the future of rail transport in Germany. The objectives of the Master Plan are to attract twice as many passengers to rail passenger transport by 2030 and to shift more freight to environmentally friendly rail while increasing its modal share to at least 25% by 2030. The key conditions for growth and for a shift to rail will be an increase in capacity with respect to infrastructure, vehicles and personnel; the use of innovative technologies and products; and an increase in the attractiveness and competitiveness of rail from the perspective of its users. In order to create these conditions, 32 areas for action and 96 measures were agreed as part of the Master Plan for Rail Transport, including the step-by-step implementation of a Germany-wide, synchronized schedule for all modes of transport. The implementation of measures is to be continuously monitored by a working group of sector representatives, together with the BMVI, and reported to the steering committee. DB Group is involved in the steering committee and will participate in implementing the measures. Another rail summit has been announced for the summer of 2021.
Master plan for rail freight transport
The implementation of the Master Plan for Rail Freight Transport will continue as per the procedure thus far in order to supplement the work of the Rail Future Alliance. The rail freight transport round table once again met with top BMVI and industry representatives on March 30, 2020. Immediate measures to be taken also include the Federal program Future of Rail Freight Transport, which seeks to strengthen innovation in the sector. A total of € 30 million has been set aside in the Federal budget for 2020. The funding guideline was published on May 12, 2020. As an additional measure aimed at strengthening rail freight transport, the Federal budget for 2020 includes a facility price promotion of € 40 million. A funding guideline will be agreed for this purpose between the government departments and notified in Brussels.
Laws on the acceleration of transport projects
- In future, significant transport projects in Germany will be planned and implemented more quickly. This is the objective of an additional Acceleration Act, adopted by the German Parliament and the Bundesrat (Upper House of Parliament) at the beginning of 2020. It includes the removal of level crossings that slow down trains or cars. In return, local authorities are to be relieved of costs if bridges or underpasses are built instead. For replacement structures – in particular, bridges and platforms – the law makes it possible to dispense with approval procedures to a greater extent than previously. With the so-called Measures Law Preparation Act (Maßnahmengesetzvorbereitungsgesetz; MgvG) it is planned that for eight selected projects on the rail the building right can be granted in future directly from the German Parliament instead of the authorities.
- In March 2020, the Federal Government also published key points for an additional Investment Acceleration Act, which is to be launched in 2020.
- The Planning Assurance Act was also adopted in May 2020 for a limited term until the end of March 2021. Its aim is to ensure that approval procedures with public participation can be carried out without significant delays, even under the challenging conditions presented by the Covid-19 pandemic. Its measures include the possibility of online consultation.
Legal basis for compensation payments for level crossings has been restored
In June 2020, the German Parliament and the Bundesrat (Upper House of Parliament) approved an amendment to the General Railways Act (Allgemeines Eisenbahngesetz; AEG), which extends the regulations relating to compensatory payments to federal-owned railways. This will provide a legal basis for compensation payments relating to the operation and maintenance of level crossings for all public railways, with retroactive effect from January 1, 2018.
Changes to the Railway Regulation Act relating to train-path and station pricing in regional rail transport
With retroactive effect from January 1, 2020, the Federal Government amended the provision set out in Section 37 (2) of the Railway Regulation Act (Eisenbahnregulierungsgesetz; ERegG). This fixes the increase in train-path and station prices in regional rail passenger transport at 1.8% per year, irrespective of the actual development of regionalization funding.
Implementation of the national Rail Noise Protection Act
In 2017, the German legislature passed a law prohibiting the operation of noisy freight wagons (Rail Noise Protection Act). This law prohibits the use of noisy freight wagons on the German network from December 13, 2020, coinciding with the 2020/2021 timetable change. DB Netz AG has updated its rail network terms and conditions of use in implementing the law. In a formal notice to the Federal Government, the European Commission expressed its opinion that the Rail Noise Protection Act contradicts EU rules and that it considers the act to be in breach of interoperability requirements.
Telecommunications signal supply throughout rail tracks
The period for supplying the main rail tracks with a cell phone signal from the spectrum auction 2015 expired at the end of 2019. According to information from the telecommunications network operators, the main transport routes had not yet been fully supplied by late 2019. The Federal Network Agency (Bundesnetzagentur; BNetzA) will examine overall compliance and any consequences arising from it.
Taking into account the customer desire for seamless connectivity and uninterrupted telephony during rail journeys, the implementation of supply requirements under the 2019 5G auction come to the fore. By late 2024, all rail tracks should be provided with a cell phone signal. As per the auction conditions, the railways are asked to cooperate with respect to the provision of coverage along the rail tracks. To fulfill this obligation to cooperate, DB Group has initiated the Rail Connectivity Master Plan project with the aim of identifying the mobile phone companies’ needs for cooperation and offering targeted actions for each. The offer of broadband GmbH also contributes to the cooperation with the extensive offer of fiber-optic capacities along the rail tracks. By December 20, 2020, the European Electronic Communications Code must be implemented under the National Telecommunications Act (Telekommunikationsgesetz; TKG). The Federal Government worked on this during the first half of 2020 and intends to present the draft bill shortly. The TKG amendment could have an impact on the scope and conditions of participation by DB Group.
Compromise on social legislation in European road freight transport
In April and July 2020 respectively, the European Council and the European Parliament accepted a compromise in relation to the so-called Mobility Package I (2019 Integrated Report). With this the legislative procedure relating to new European standards for driving and rest periods, posting and cabotage are concluded after about three years of intensive negotiations. In future, truck drivers will have the right to return to their home town in the future at least every three or four weeks. Regular weekly rest periods (45 hours) must be spent outside the driver’s cab. In the case of cabotage, three transports within seven days should remain possible. In addition, a cooling-off period of four days must be upheld. This rule also applies to the inflow and onward carriage of combined transport.
To improve monitoring, in future new trucks will need to be equipped with an intelligent tachograph.
Proposals for a multi-year eu financial framework and the European Recovery Plan
To remedy the financial impact of the Covid-19 crisis, boost recovery and employment, and protect jobs, the European Commission proposed on May 27, 2020, a revision of the 2021 – 2027 Multiannual Financial Framework (MFF), along with a Recovery Plan for Europe. This includes a recovery instrument Next Generation EU for the economic recovery of Europe after the Covid-19 crisis. A total of € 750 billion will be made available for this purpose. In light of the European Green Deal, the Commission has cited sustainable transport and logistics, boosting rail travel and clean mobility in the cities and regions as elements of its reconstruction strategy. The Commission is proposing a budget of € 1.1 billion for the MFF. The European Council reached a compromise in relation to the Commission’s proposals on July 21, 2020. The key elements remain, however a greater proportion of the money provided by the Commission will be allocated as loans, rather than as grants. The Connecting Europe Facility (CEF) funding will remain the same compared with the original Commission proposal.
EU restricts use of loud freight cars across Europe from 2024
The technical specification for interoperability (TSI) relating to the subsystem “rolling stock – noise” (TSI Noise) provides for a prohibition on operating loud freight cars on heavily frequented lines throughout the European Union (EU) from the end of 2024. So-called quieter routes are all routes of more than 20 km on which more than 12 freight trains operate overnight. Under this regulation, the Commission is to submit a report on the observed reduced braking performance of freight cars equipped with composite brake shoes in severe Nordic winter conditions. Should the report show that the use of these freight cars creates safety issues that cannot be solved by means of operational and technical measures, the Commission shall propose amendments to this TSI. The European Union Agency for Railways (ERA) set up a task force in order to assess the extent of the reported lack of braking performance. The results were sent to the Commission at the beginning of June 2020. It was therefore not possible to draw any final conclusions due to a number of factors, including insufficient weather conditions at the time of testing. The ERA therefore recommends that further tests be carried out next winter before a final assessment is made.