National environment

Implementation of common good-oriented infrastructure

Since the end of 2023, DB InfraGO AG has been the common good-oriented infrastructure company of DB Group: on December 27, 2023, DB Netz AG was renamed as DB InfraGO AG following its registration in the trade register. At the same time, DB Station&Service AG was merged into DB InfraGO AG. The track infrastructure will therefore be managed, planned and further developed from a single source from 2024. The quality, capacity and stability of rail operations should be improved continuously. This will create the conditions for achieving the targets regarding growth and the shift in the mode of transport set by the Federal Government and the Strong Rail strategy. The underlying reform package comprises five pillars:

• The first pillar is the overall content-related program for the new management of the infrastructure with the following fields of action: availability and operation, creation of the high-performance network, maintenance and modernization of the other parts 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 is intended to reverse the trend in terms of aging and quality of the rail network and stations. By 2030, this is expected to create noticeably greater robustness and capacity.
• The second pillar is the creation of the necessary legal bases, in particular making the financing regulations more flexible through a reform of the Federal Rail Infrastructure Extension Act (Bundesschienenwegeausbau­gesetz; BSWAG). The amendment to BSWAG came into force on July­ 9, 2024. Further measures to improve the rail network are to be implemented by means of the Modern Rail­way Act (Implementation of the Rail Acceleration Commission).
• The third pillar redefines the financing framework. The financing architecture of the various funding pots is to be simplified based on the recommendations of the Rail Acceleration Commission. Moreover, the additional financial resources necessary for the implementation of the entire program need to be provided by the Federal Government, and the content of the Performance and Financing Agreement (Leistungs- und Finanzierungs­vereinbarung; LuFV) needs to be developed further.
• With the fourth pillar, the Federal Government intends to further develop the management of the infrastructure. Infraplan is a central control tool. Infraplan is intended to present measures, strategies and overarching targets for infrastructure development for a rolling five-year period – including key figures and documentation of progress.

The institutionalized involvement of the industry in the work of DB InfraGO AG is carried out via the Sector Advisory Board, which was constituted on March 25, 2024. Its targets are to increase transparency and participation, as well as to exchange specialist knowledge. The new Sector Advisory Board replaces the existing advisory boards, the Rail Network Advisory Board and the Station Advisory Board. The Federal Ministry for Digital and Transport (Bun­desministerium für Digitales und Verkehr; BMDV) operates the branch office of the Sector Advisory Board.

• The fifth pillar includes the organizational merger of DB Netz AG and DB Station&Service AG. DB InfraGO then developed a mission statement for 2030, which was completed in spring 2024. The mission statement describes the requirements placed on DB InfraGO for achieving corporate and political targets.

2024 Federal budget

The 2024 Federal budget was approved on February 2, ­­2024. A total of over € 17 billion is available for the major rail items, which is about € 7 billion more than provided for in the 2023 Fed­­eral budget and the previous Government financial planning.

• Part of the funding for rail is an equity increase of € 5.5 billion for infrastructure, € 4.375 billion more than provided for in the Government draft. The additional equity increase is intended to compensate for funds lost from the Climate and Transformation Fund (Klima- und Transformationsfond; KTF) in the Government draft of August 9, 2023.
• The funds allocated to the budget item for the modernization of the existing network (Performance and Financing Agreement) saw significant growth of just under € 2.8 billion compared to 2023, bringing them to just under € 7.5 billion. The allocation of funding in the 2024 Federal budget covers the financing needs for the general modernization and maintenance of the existing network in 2024.
• The European Rail Traffic Management System (ERTMS) item for the digitalization of the rail system was allocated just under € 1.1 billion in 2024, an increase of about € 0.45 billion compared to 2023.
• The funds allocated to the construction and expansion of new and existing lines under the requirement plan amounted to just under € 1.7 billion, about € 0.3 billion less than in 2023.

In the area of support for rail transport, there have been reductions compared to the Government draft in order to finance the lowering of the BMDV budget reduction required by the overall budget consolidation. The cuts are mainly related to the train-path and facility price support for rail freight transport, which is € 229 million for 2024 (instead of € 350 million) or € 20 million (instead of € 85 million). The budget item for single wagon transport support remains unchanged at just under € 300 million, which is a significantly higher level than in 2023. Together with the facility price support of € 20 million, there is a total of just under € 320 million available for the support of single wagon transport in 2024.

The 2024 Federal budget, the current financial plan up to 2027 and the DB Group’s own contribution together provide about € 27 billion of additional funds for the period from 2024 to 2027. The additional funding needed for rail up to 2027 has been identified as € 45 billion in total and is therefore not yet fully covered.

Implementation of the Rail Acceleration Commission

On December 13, 2022, the Rail Acceleration Commission presented its final report under the guidance of the BMDV. The Commission provides comprehensive recommendations for action to speed up 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 has developed a list proposal of 89 measures that can be implemented in the short-term, focusing on track change facilities. Faster approval processes are to be achieved through legislation modeled on the example of the energy sector. To reduce the complexity of track infrastructure financing, a new financing architecture is recommended that summarizes financing sources and uses part­­­ly additional income from truck tolls. On April 24, 2024, the BMDV submitted the second progress report on the implementation of the recommendations of the Rail Acceleration Commission. The report states that 38 recommendations are either in the process of being implemented or have already been implemented in full. The implementation of 32 further recommendations is being prepared. Several of the recommendations require amendments to existing laws. Some of the Rail Acceleration Commission’s recommendations have already been taken into account in legislative procedures. These include the implementation of the sublime public interest for numerous infrastructure projects (including all projects set out in the rail requirement plan and the Municipal Transport Financing Act) in the Approval Acceleration Act that came into force in late 2023. The truck toll has also been expanded and adjusted so that a proportion of the income from it is now also used for Federal rail infrastructure.

Further legislative recommendations from the Rail Acceleration Commission are currently being implemented as a result of the adoption of the Federal Rail Infrastructure Extension Act and the Government draft of the Fourth Bureaucracy Reduction Act (Regierungsentwurf zum Vierten Bürokratieentlastungsgesetz; BEG IV). The draft of the BEG IV includes measures to accelerate planning for rail. The BMDV has announced a draft of the Modern Railway Act recommended by the Rail Acceleration Commission for the combined implementation of its proposals, to be completed in the summer of 2024.

Amendment to the Federal Climate Protection Law

The amendment to the Federal Climate Protection Law came into force on July 17, 2024. Germany’s climate protection targets remain unchanged. By 2030, the reduction is expected to be 65% compared to 1990 and 88% by 2040, and net greenhouse gas neutrality is expected to be reached by 2045.

In future, all sectors will be considered in a forward-looking multi-year accounting system. The forecast emission trends, together with monitoring of the previous year’s emissions data, will serve as a basis for action. 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.

Introduction of a mobility budget in tax law

As part of the Annual Tax Act 2024, the Federal Government is planning for the first time to introduce a mobility budget. A mobility budget is an offer made available to employees for the use of off-duty mobility services, regardless of the means of transport (e.g. e-scooters, rental bicycles, car-sharing), in addition to the wages otherwise due. Single tickets and passes for bus and rail transport are also covered by the mobility budget. The use of off-duty mobility services is to be taxable at 25% on a flat-rate basis up to a maximum of € 2,400 per year. Long-term motor vehicle leases, company bicycles or job tickets will not be covered by the flat-rate taxation option. The rules regarding taxation of company cars remain unchanged.

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 interim results after about a year show a high level of acceptance among customers, and intensive use: an average of 11.2 million passengers a month hold a Germany-­Ticket. Since the Germany-Ticket was introduced, DB Regional has recorded passenger growth of 14%. Two-thirds of DB Regional customers hold a Germany-Ticket. The frequency of local public transport use and the total distance covered have risen thanks to the ticket. Of all journeys made with a Germany-Ticket, 12% displaced other means of transport, 7% thereof motorized private transport.

There are currently no long-term funding prospects for the Germany-Ticket. The transferability of funds from 2023 to 2024 and from 2024 to 2025, as adopted by the Federal Government and the Federal states at the Transport Ministers’ Conference on November 6, 2023, is to be implemented in an amendment to the Regionalization Act. A draft to that effect was adopted by the Federal Government on July 17, 2024. At their meeting on January 22, 2024, the transport ministers of the Federal states set the price at € 49 per month for 2024 and announced that the ticket price for 2025 would be set in fall 2024. At the special meeting on July 8, 2024, the transport ministers of the Federal states determined that, according to the current funding requirement forecasts ­for 2025, a price increase for the Germany-Ticket would be required.

The existing funding for the Germany-Ticket up to 2025 was adopted in March 2023 as part of the Ninth Act Amending the Regionalization Act. According to the Act, the Federal Government and the Federal states each cover half of the costs of the Germany-Ticket at € 1.5 billion per year from 2023 to 2025. In addition to the increase in regionalization funds, it was decided with this amendment that the increase in train-path and station charges for regional rail passenger transport will be set at 1.8% per annum until 2025. As a result, there is a deviation from the previous regulation in the Railway Regulation Act, according to which the charges for regional rail passenger transport are linked to the regular increase of regionalization funds, which was adjusted from 1.8% to 3.0% from 2023. This capping leads to a strong, disproportionately high increase in the train-path usage fees for long-distance and freight transport.

In addition to several of the topics described above, there are other relevant legislative procedures for the field of infra­structure, which are explained below.

Amendment to the Federal Rail Infrastructure Extension Act

The Fourth Act Amending the Federal Rail Infrastructure Extension Act (Bundesschienenwegeausbaugesetz; BSWAG) came into force on July 9, 2024. The BSWAG is the legal basis for capital expenditures on Federal rail infrastructure. The amendment removes existing capital expenditure barriers and strengthens the performance capability and availability of track infrastructure. In concrete terms, it creates new financing options by opening up public funding to non-capital expenditure elements. In future, maintenance expenses, for example, could also be subsidized by the Federal Government, as could one-time expenses (e.g. dismantling, IT services) and follow-up costs of measures initiated by the Federal Government. The adoption of the amendment was made possible by the agreement between the Federal Government and the Federal states on the remaining open questions in the Mediation Committee on June 12, 2024. The agreed compromise set out the cost sharing arrangement for rail replacement services during the general modernizations, the funding option for equipping vehicles with digital (ETCS) on-board equipment, the ability to fund concourse buildings (exclusion of commercial spaces) and clarifications on the application of funds in the context of general modernizations.

Germany pact for the acceleration of planning

On November 6, 2023, the leaders of the Federal states reached an agreement with the German Chancellor on a pact to accelerate planning, approval and implementation. The pact contains numerous measures, some of which are in line with the recommendations of the Rail Acceleration Commission. In particular, these relate to the avoidance of replanning, the introduction of reporting date regulations on the legal and factual situation at the time of the application and the establishment of wildlife conservation standards. Furthermore, the procedures are to be shortened by optimized environmental impact assessments and plan approval procedures. Further acceleration legislation is to be implemented in order to implement the pact. The first legislative measures under the pact have been implemented in the amendment to the Federal Immission Control Act (Bundes-Immissions­schutzgesetz; BImSchG). For rail, this will make it easier to begin construction early in some cases.

Implementation of Master Plan for Rail Freight Transport

The implementation of the Master Plan for Rail Freight Transport will continue as per the current procedure in order to supplement the work of the Rail Future Alliance. Important matters for rail freight transport include the prorated funding of train-path and facility prices, the Federal Future of Rail Freight Transport program, the Funding Guidelines for Railway Sidings and the Combined Transport Funding Guidelines.

On June 28, 2024, the BMDV created the legal basis for an extension of the prorated train-path price support in rail freight transport. The new period runs from June 28, 2024, to November 30, 2028. For 2024, about € 229 million is provided for this in the Federal budget.

Support of single wagon transport

On May 21, 2024, the European Commission approved the Directive on Support for Operating Costs in single wagon transport. This authorizes grants totaling € 1.7 billion over a period of five years up to 2029. The Federal budget makes just under € 300 million available to the sector for 2024. Support for this transport has been provided since July 1, 2024.

Rail Noise Protection Act

On June 27, 2024, the German Parliament passed the Act on Rail Noise Protection (Gesetz zum Schienenlärmschutz; SchlärmschG). The Rail Noise Protection Act supplements the concept of quieter lines as defined by the Technical Specifications for Interoperability – Noise (TSI NOI) with regulatory requirements. Subject to the final referral to the Upper House of Parliament (Bundesrat), the existing Rail Noise Protection Act will cease to apply when the concept of quieter lines becomes effective at the time of the timetable change in December 2024.