Implementation of common good-oriented infrastructure

With regard to the common good-oriented infrastructure, the Federal Government’s coalition agreement stipulates the following: “The infrastructure units (DB Netz, DB Station and Service) of Deutsche Bahn will be merged within the Group into a new, common good-oriented infrastructure unit. This will be wholly owned by Deutsche Bahn as a part of DB Group. Future profits from the operation of infrastructure will remain with the new infrastructure unit.”

The Federal Government and DB Group are aiming to create this common good-oriented infrastructure by January 1, 2024. This common good-oriented infrastructure is intended to be consistently geared toward achieving rail policy goals. It consists of five pillars. The first pillar is the concept of and overall program for the new management of the infrastructure with the following elements: creation of a high-performance network, maintenance and modernization of the network, rapid capacity expansion, consistent digitalization, stations of the future, efficient service facilities, and expansion/new construction and electrification. The new management regime will reverse the trend of network and station aging and quality, and will noticeably increase robustness and capacity by 2030. The second pillar is the creation of the necessary legal basis, in particular, the transition to flexible financing regulations by reforming the Federal Rail Infrastructure Extension Act. The third pillar redefines the financing frame­work. On the one hand, derived from the recommendations of the Rail Acceleration Commission, the financing architecture is to be adapted by simplifying the subvention funds. On the other hand, the necessary additional financial resources must be made available by the budgetary legislator to implement the overall program (government draft of the 2024 Federal budget) and refinement of the content of the Performance and Financing Agreement. With the fourth pillar, the Federal Government wants to strengthen the future corporate and financial management of the infrastructure. The fifth pillar creates the organizational framework based on the content. In concrete terms, DB Station&Service AG will be merged with DB Netz AG.

Government draft of the 2024 Federal budget

On July 5, 2023, the Federal Government adopted the draft of the 2024 Federal budget and financial plan up to 2027. In the area of track infrastructure, there will be an increase in funding of € 2.9 billion in 2024 compared to the 2023 estimates, in particular for the conservation of assets (Performance and Financing Agreement; € +1.8 billion), Digitalization/European Rail Traffic Management System (ERTMS) (€ +0.7 billion) and requirement plan (€ +0.3 billion). The draft budget also provides for increases in funding for rail freight transport compared to 2023, mainly due to an increase in support for single wagon transport to € 300 million (€ +220 million compared to 2023). In addition, both the facility price support (€ 85 million) and the train-path price support (€ 350 million) will continue at the 2023 level. This means a total of € 13.0 billion will be allocated to rail in 2024.

In total, the Federal Ministry for Digital Affairs and Transport (BMDV) will have a budget of around € 11.3 billion more from 2024 to 2027 than previously allocated in the financial plan for rail, totaling € 53.3 billion. The additional funds will also be financed by the use of prorated income from the CO₂ surcharge from truck tolls. DB Group has an additional requirement of € 45 billion for the years 2024 to 2027 compared to the previous financial plan. However, with the increases in infrastructure funding provided for in the draft budget and financial plan, these additional requirements will still only be partially reflected up to 2027. In the face of this, the Federal Government reaffirmed in its cabinet draft the decision of the coalition committee of March 28, 2023, to cover up to € 45 billion of DB Group’s capital expenditure requirements. In this context, it is also to be examined how a contribution totaling € 15 billion can be made in the next two years to cover additional capital expenditure requirements.

The economic plan for the Climate Protection and Transformation Fund is to be adopted by mid-August 2023 and then sent to the lower (Bundestag) and upper (Bundesrat) houses of Parliament together with the draft budget. Starting in September 2023, the Federal budget will be addressed in the German Parliament, with a vote expected on December 1, 2023.

Rail Acceleration Commission

On December 13, 2022, the Rail Acceleration Commission pre­­sented its final report at the direction of the BMDV. Industry associations and DB Group were involved in its preparation. The commission provides comprehensive recommendations for action to accelerate planning, approval and construction processes in rail transport and to further develop financing processes. It proposes the creation of a high-performance network through the general modernization of highly utilized lines. The commission also supports the proposals for small and medium measures drawn up by the Association of German Transport Companies (VDV) and DB Group. From these, it has developed a list of 89 proposals that can be implemented in the short term, with the focus on transfer points. Approval processes are intended to be completed faster, in particular through legislation modeled on the example of the energy sector, for example a legal basis of overriding public interest in railway development. The commission noted that the financing of track infrastructure is highly complex and therefore recommended a new financing architecture. In particular, sources of financing should be combined and shares of additional revenue from truck tolls used for this purpose.

On June 20, 2023, the BMDV presented its first progress report on the implementation of the commission’s recommendations. According to the report, 17 commission recommendations (four of them in modified form) are in the process of being implemented. The implementation of 27 further commission recommendations (eight of which are in modified form) is being prepared; 11 recommendations are still under consideration.

Several of the recommendations require amendments ­to existing laws. Some of the commission’s recommendations have already been factored into ongoing legislative procedures. This applies in particular to the Act to Accelerate Planning and Approval Procedures in the Transport Sector and to Implement Directive (EU) 2021/1187 on Streamlining Measures for Advancing the Realization of the Trans-European Transport Network (Transport Authorization Procedures Ac­cel­­eration Act) adopted in the Federal Cabinet on May 3, 2023, the Fourth Act to Amend the Federal Rail Infrastructure Extension Act adopted in the Cabinet on June 7, 2023, and the third act to amend toll regulations adopted in the Cabinet on June 14, 2023. In these bills, for example, the recommendation on overriding interest will be limited to the rail require­­ment plan, new funding opportunities for the Federal Govern­ment will be created and the recommendation on truck tolls will be implemented in accordance with the proposal.

The BMDV has announced the Modern Railways Act, proposed by the Acceleration Commission, for the third quarter of 2023.

Expansion of truck tolls

On June 14, 2023, the Federal Government passed the third act to amend toll regulations. It provides for the extension of the truck toll to vehicles over 3.5 t (previously 7.5 t) starting mid-2024 and for a higher pricing on CO₂ emissions starting December 2023. From 2024 to 2027, the Federal Government expects toll revenues to total around € 64 billion. According to the bill, half of the total toll revenue is to be used for measures in the area of mobility, with most of that for Federal railways.

Defensive shield against the impact of the war in Ukraine

The Federal Government is using a financial “defensive shield” to reduce rising energy costs and the most severe consequenc­es for consumers and companies. To this end, in 2022, the Economic Stabilization Fund (ESF) is being supplied additional lines of credit amounting to € 200 billion to finance the Government’s gas and electricity price brake scheme. The required laws (German Electricity Price Brake Act (Strompreisbremsegesetz) and the Natural Gas Heat Price Brake Act (Erdgas-Wärme-Preisbremsegesetz)) entered into force on December 24, 2022. The energy price brakes will also take the strain off rail transport. On June 23, 2023, the German Parliament passed an amendment containing further amendments to the statutory energy price brakes, which were also passed by the Upper House of Parliament (Bundesrat) on July 7, 2023. This amendment essentially clarifies legal issues. The legal amendments also serve to ensure that implementation in the railways is fully legal.

Draft amendment to the Federal Climate Change Act

On June 21, 2023, the Federal Cabinet adopted an amendment to the Federal Climate Change Act. Germany’s climate protection targets remain unchanged. These targets are to achieve a reduction of 65% compared to 1990 by 2030, 88% by 2040 and net greenhouse gas neutrality by 2045.

In future, all sectors will be included in a comprehensive, multi-year, forward-looking account. Together with monitoring of emissions data from the previous year, the projected emissions development is to become the basis for action by 2030 as well as for 2035, 2040 and 2045. If the projection data shows a missed target in total annual emissions for two consecutive years, the Federal Government must work out measures to achieve the target.

In future, the Federal Government is to present a comprehensive climate action program no later than 12 months after the start of each legislative period.

Draft Climate Action Program 2023

On June 21, 2023, the Federal Government recognized the draft Climate Action Program 2023. The Climate Action Program 2023 aims to ensure compliance with the 2030 climate protection targets. It includes measures covering all sectors.

For the transport sector, in addition to the areas of increased use of the potential of synthetic fuels, drive changes for trucks and heavy commercial vehicles, acceleration of climate neutrality for passenger cars, renewable energies and electrification of air and ocean transport, digitalization, land-use and transport planning as well as mobility management, the topic of rail transport and strengthening urban and regional transport was addressed. With regard to rail, the Federal Government reaffirms that, in the coming years, con­­­siderable funding will be made available to modernize and expand the rail network. Priority will be given to increasing the capacity of the core network. The additional capital expenditure requirements to 2027 will amount to around € 45 billion. This is to be covered, as far as financially feasible, through the use of prorated revenues from the CO₂ surcharge for truck tolls, among other things. In addition to intensifying the ramp-up of capital expenditures for rail, measures include strengthening and digitalizing the existing network, strengthening rail freight transport and a digitalization package for rail.

Introduction of the Germany-Ticket

The Germany-Ticket, which is valid for local public transport nationwide, was introduced on May 1, 2023, at a price of € 49 per month. The agreement between the Federal Government and the Federal states on the financing of the ticket took place at the Conference of Minister-Presidents on December 8, 2022. According to the agreement, the Federal Government and the Federal states each cover half of the costs for the ticket with € 1.5 billion per year from 2023 to 2025. Any additional costs incurred by the transport companies when introducing the ticket in 2023 will also be covered 50/50 by the Federal Government and the states. The financing rules were formally implemented under the Ninth Act to Amend the Regionalization Act. In addition to the increase in regionalization funds, this amendment increases train-path usage and station fees for regional rail passenger transport to 1.8% per year by 2025. This is a deviation from the previous regulation in the Railway Regulation Act, which stipulated that regional rail passenger transport fees are linked to changes in regionalization funds, which was increased from 1.8% to 3.0% starting in 2023.

Germany in sync

Germany in sync is an essential element of the Master Plan for Rail Transport. In 2021, as a result of the assessment of a range of measures for Germany in sync, around 180 measures were made urgent priorities in the rail requirement plan. This is linked to a basic ability to finance the measures under the requirement plan. The assessment is based on the target schedule 2030 + drafted by independent Federal Government experts. On May 3, 2023, the Federal Cabinet adopted a corresponding amendment to Appendix 1 to the Federal Rail Infrastructure Extension Act (Bundesschienenwegeausbau­gesetz; BSWAG), which will be part of the Law to Accelerate Planning and Approval Procedures in the Transport Sector and to Implement Directive (EU) 2021/1187 on Streamlining Measures for Advancing the Realization of the Trans-European Transport Network.

In order to provide a clear and sufficiently definitive designation of the projects required for Germany in sync, the projects in the rail requirement plan – a total of 11 project bundles – will be created in Appendix 1. These include both new and existing projects.

At the end of April 2023, the BMDV also began a dialog with stakeholders to update the target schedule for Germany in sync. The target schedule will be adapted to the changing needs of the users, among others, to the states’ regional rail passenger transport concepts. The purpose here is not to redesign the target schedule. The hubs and target travel times providing structure to this schedule nationwide remain unchanged.

Implementation of the EU Rail Passenger Rights Regulation

The EU Rail Passenger Rights Regulation entered into force on June 7, 2023. It adds an exception to the obligation to provide compensation in cases of force majeure. The national regulatory options are being implemented by the amendment to the railway traffic ordinance (Eisenbahn-Verkehrsordnung; EVO) and the General Railways Act (Allgemeines Eisenbahn­gesetz; AEG). The Upper House of Parliament (Bundesrat) adopted the bill amending the AEG on June 16, 2023, and the revised EVO on July 7, 2023. The compensation schemes continue to follow the established delay thresholds of 60 and 120 minutes and compensation levels of 25% and 50% of the ticket price, respectively. The Germany-Ticket is classified as a significantly discounted ticket, meaning passengers are not entitled to higher-quality trains after delays of 20 minutes. Starting January 1, 2025, the industry will also be required to establish a single point of contact for passengers with reduced mobility.

Federal Government amends Federal Rail Infrastructure Extension Act

On June 7, 2023, the Federal Cabinet adopted a government bill of a Fourth Act to Amend the BSWAG. The BSWAG is the legal basis for capital expenditures on Federal rail infrastructure. With the amendment, the Federal Government wants to remove existing capital expenditure barriers and strengthen the performance capability and availability of track infrastructure. The cabinet bill creates new financing options by opening up public funding to non-investment matters. This means that, in future, maintenance costs should also be funded by the Federal Government, as should one-off costs (for example decommissioning, IT services) and follow-up costs of Federal measures. There is still a need for clarification on some points, including with regard to the financing capacity of reception buildings at stations and service facilities. The legislative procedure is slated to be completed by fall 2023. On the basis of this law, the financing agreements between the Federal Government and DB Group can then be supplemented and further developed in order to ensure the reliable call-up of funds starting 2024 under the new framework.

Federal Government accelerating approval procedures in transport sector

On May 3, 2023, the Federal Cabinet adopted the Law to Accelerate Planning and Approval Procedures in the Transport Sector and to Implement Directive (EU) 2021/1187 on Streamlining Measures for Advancing the Realization of the Trans-­European Transport Network (TEN-T). For rail, the Federal Government bill establishes an overriding public interest in all projects in the rail requirement plan. This is intended primarily to accelerate the approval of exemptions in wildlife conservation. Paperless public participation will be facilitated for all rail-related plan approval procedures. This avoids time-consuming media breaks in DB application documents. Deadlines will also be introduced for plan approval procedures for TEN-T corridors. Furthermore, the regulation on noise reduction deadlines set in the last legislative period is being extended, which is intended to avoid replanning in ongoing plan approval procedures more than before.

German Parliament passes Infrastructure Acceleration Act

On February 10, 2023, the German Parliament passed the law to accelerate administrative court proceedings in the area of infrastructure, which is intended to significantly reduce the duration of court proceedings in the case of projects with “high significance for the economy or infrastructure.” This also includes the expansion of the rail network. Overall, the law should provide more flexibility for the courts and more streamlined court proceedings.

Master Plan for Rail Freight Transport

The implementation of the Master Plan for Rail Freight Transport will continue as per the current procedure in support of the Rail Future Alliance. Important issues from the Master Plan for Rail Freight Transport are also included in the Master Plan for Rail Transport. Important funding instruments for rail freight transport are the prorated funding of train-path and facility prices, the Federal Future of Rail Freight Transport Program, the Siding Support Directive and the Combined Transport Support Directive.

Train-path price support has been relieving the burden on rail freight transport since 2018. The corresponding support directive was limited to June 30, 2023. In June 2023, the European Commission approved the extension of the support directive from July 1, 2023, to November 30, 2024. The total budget for the declared continued support period is around € 368 million.

Prioritization of energy transport

The German Energy Security Transport Ordinance (Energie­sicherungstransportverordnung; EnSiTrV) entered into force on August 30, 2022. It initially had a term of six months, to the end of February 2023. With the approval of the Upper House of Parliament (Bundesrat), the term was extended to March 31, 2024. Another amending ordinance will freeze the ordinance on September 1, 2023. From this point on, the EnSiTrV only opens up the possibility of prioritizing the transport of en­­­­ergy sources listed in an annex and of large transformers on railways over other traffic once the Federal Ministry for Economic Affairs and Climate Protection has identified a ­potential supply bottleneck for individual locations or regions. Currently, there is a general preferential option for these. As a last resort, the ordinance provides for the possibility of interfering with existing infrastructure utilization contracts in favor of the transport of energy sources and large transformers.