National environment

Coalition agreement of the new Federal Government

CDU/CSU and SPD signed the coalition agreement at the beginning of May 2025. It includes numerous rail-related plans. The implementation of key points is subject to funding possibilities. The main plans are:

• Capital expenditures in the German rail network are to be increased. The Infraplan is to be developed as a statutory control instrument and provided with a corresponding binding funding commitment (rail infrastructure fund). The train-path pricing system is to be reformed. Further measures to accelerate the planning and approval processes are to be implemented.
• In the medium term, the parties want to implement a fundamental rail reform. DB InfraGO is to be further unbundled within the integrated DB Group. Personnel, legal, and organizational measures must be taken to achieve this. DB Group’s internal labor market is to be retained.
• A new legal basis for the funding of local public transport is to be established with the Federal states, and a modernization pact is to be launched. There is to be an increase in the regionalization funds and the funds under the Municipal Transport Financing Act (Gemeinde­ver­kehrs­finanzierungsgesetz; GVFG). The Germany-Ticket is to be continued beyond 2025, with the extent to which it is funded by users set to increase gradually and in a socially responsible manner from 2029.
• With regard to DB Cargo, a return to competitiveness and profitability in the short term is to be examined.
• In terms of energy and climate policy, the coalition wants to reduce the electricity tax for all to the European minimum and lower electricity grid fees, which would also limit the burden on the electricity-intensive rail transport.

Amendments to the German Basic Law to provide additional financial scope for debt

In March 2025, the Lower House of Parliament (Bundestag) and Upper House of Parliament (Bundesrat) passed an amendment to the German Basic Law to provide additional financial scope for debt. The law came into force on March 25, 2025. The changes concern three central points:

• Firstly, defense spending, Federal spending on civil defense and civil protection as well as for intelligence services, the protection of information technology systems, and aid for states attacked in violation of international law will no longer be subject to the debt brake if they exceed 1% of gross domestic product (GDP).
• Secondly, the Federal states will be granted an annual debt scope of 0.35% of GDP in future.
• Thirdly, the option of establishing a special fund exempt from the debt brake “for additional capital expenditures in infrastructure and for additional capital expenditures to achieve climate neutrality by 2045” with a volume of up to € 500 billion and a term of 12 years has been put in place. Of this, € 100 billion is to be made available to the Federal states for capital expenditures. A further € 100 billion is to flow into the Climate and Transformation Fund (Klima- und Transformationsfond; KTF). The specific structure and establishment of the special fund will be governed by a separate law.

Preliminary budget management 2025

In summer 2024, the then Federal Government approved the draft for the 2025 Federal budget and the financial plan up to 2028. It provided for capital expenditures of € 18.1 billion in the Federal rail infrastructure in 2025, including a loan of € 3 billion and funds for equity increases of € 10.4 billion. This represents an increase of just under € 2 billion compared to 2024. Expenditures of € 0.8 billion were planned for rail transport support items. This represents an increase of € 0.2 billion compared to 2024.

Due to the early elections, the 2025 Federal budget had not been adopted by the end of the first half of 2025. This means that preliminary budget management has been in place since January 1, 2025. The Federal Ministry of Finance (BMF) announced the framework conditions in a circular letter in mid-December 2024. In June 2025, the BMF updated the circular letter. For rail, the appropriations shown above initially formed the respective upper limits. Following the Federal Government’s decision on the 2025 Federal budget at the end of June, the appropriations contained therein now form the basis and the upper limit of preliminary budget management. Capital expenditures can generally be made up to the upper limit, provided that the measures are ongoing or contractual obligations apply. Funds of up to 45% of the upper limit were initially available for support items. With the update of the BMF circular letter in June 2025, this figure was raised to 70%.

In December 2024, the Federal Government and DB Group concluded an agreement on the use of funds to increase equity under the preliminary budget management, which provides for a payment of about € 8.5 billion in 2025. The first tranche of € 4.24 billion was paid out at the beginning of March 2025.

2025 Federal budget, key parameters to 2029, Infrastructure and Climate Neutrality Special Fund

At its cabinet meeting on June 24, 2025, the Federal Government resolved the draft Federal budget for 2025, the key parameters for 2026 to 2029, and the Law Establishing the Infrastructure and Climate Neutrality Special Fund (Sondervermögen Infrastruktur und Klimaneutralität; SVIK), including the economic plan for 2025. The following funds appropriations are earmarked for rail:

• Funds of € 21.8 billion are earmarked for capital expenditures in the Federal rail infrastructure in 2025. This represents an increase of € 3.7 billion compared to the first Government draft from summer 2024. These increased funds are made possible by the SVIK. The appropriations for the existing network (€ 7.6 billion) and digitalization (€ 1.6 billion) will be funded entirely from the SVIK, and the funds previously included in the budget of the Federal Ministry of Transport (Bundesministeriums für Verkehr; BMV) will be transferred to the SVIK. Another new source of funding is the defense budget, which includes € 0.1 billion for defense-related requirement plan measures. A further € 0.5 billion of the BMV budget is earmarked for requirement plan measures. Part of the capital expenditures in the Federal rail infrastructure are equity increases in the amount of € 8.5 billion and a loan of € 3 billion already included in the first Government draft.
• Support for rail transport in 2025 is unchanged compared to the first Government draft. Of the € 0.8 billion, € 300 million is attributable to support for single wagon transport, € 275 million to train-path price support for rail freight transport, and € 105 million to train-path price support for long-distance transport.

The planned budget appropriations for 2025 essentially cover the necessary requirements for the modernization, digitalization and expansion of the rail infrastructure in 2025. Among the support topics, the funding of the train-path price support for long-distance and freight transport, in particular, is not sufficient to compensate for the additional burdens on access permit holders from the 2025 train-path pricing system.

With the resolution on the key parameters up to 2029, the BMV announced that a total of almost € 107 billion is earmarked for capital expenditures in the Federal rail infrastructure, of which about € 81 billion is to be funded from the SVIK. The planned appropriations would largely cover the infrastructure requirements for 2026. For the period from 2027, it must be ensured that reliable and adequate funding is also achieved in the medium and long term.

The parliamentary procedure for the 2025 Federal budget begins in July 2025 and is expected to be completed by the end of September 2025. The law establishing the SVIK is to be discussed at the same time as the 2025 Federal budget. The Government resolution for the 2026 Federal budget and the financial plan up to 2029 is due to take place at the end of July 2025. Parliamentary deliberations are scheduled to begin at the end of September 2025 and be concluded in the Lower House of Parliament in November 2025 and in the Upper House of Parliament in December 2025.

Implementation of the Rail Acceleration Commission

At the end of 2022, the Rail Acceleration Commission presented its final report with specific recommendations to the Federal Government and the industry. Following interim reports in 2023 and 2024, monitoring was concluded at the beginning of April 2025 with an implementation report on the Rail Acceleration Commission by the BMV. Out of 73 proposed measures, 42 were being implemented or had already been fully implemented at this date. A further 28 measures are in preparation, in some cases due to the premature end of the previous legislative period. The Rail Acceleration Commission’s recommendations for the emergency management of DB Group, the simplification of infrastructure commissioning and species protection standards are to be implemented through ordinances or administrative regulations. The administrative regulation on bird protection during the electrification of rail infrastructure was adopted as a binding species protection standard at the end of May 2025 and came into force at the beginning of July 2025. A similar regulation is also planned for sand lizards and wall lizards. Three measures are no longer being implemented. This concerns the recommendations for a special program for service facilities, for a planning reserve for small and medium-sized projects and for accelerating the investigation in cases of personal injury.

Germany-Ticket

The price of the Germany-Ticket, which is valid nationwide for local public transport, was increased from € 49 to € 58 per month on January 1, 2025. The interim results after about two years show a high level of acceptance among customers and intensive use, with about 13.5 million monthly users. The ticket has increased the frequency of public transport use and the distance traveled. In the coalition agreement, the CDU/CSU and the SPD commit to the continued existence of the Germany-Ticket. The legal basis for funding the ticket beyond 2025 is currently being prepared by the BMV and must also be approved by the Upper House of Parliament.

In addition to the developments described above, such as those relating to the Federal budget and common good-oriented infrastructure, several legislative processes are relevant to the field of infrastructure, which are explained below.

Amendment to section 23 AEG

The regulations on the exemption of land from the purpose of rail operations in Section 23 of the General Railways Act (Allgemeines Eisenbahngesetz; AEG) have been modified. A corresponding amendment was passed by the Lower House of Parliament at the end of June 2025 and by the Upper House of Parliament in mid-July 2025. According to the amendment to the law, exemptions are possible if “there is no longer a need for transport or a replacement has been established for the rail infrastructure and the infrastructure is no longer expected to be used for its intended purpose in the long term, and this does not prevent the recommissioning of a line.” In this case, the land can be used for other purposes. Previously, exemptions were only possible if there was an overriding public interest in the planned use for which the exemption was to be granted.

Amendment to the Railway Regulation Act to mitigate the rise in train-path prices

In late June 2025, the BMV presented a draft law to mitigate the increase in train-path usage fees at the Federal railways. The main aim of the draft bill is to reduce the increase in train-path prices resulting from the Federal Government’s equity injections. To this end, the return on equity is to be defined in future as the average of a standard capital market interest rate and a risk-free interest rate. Under the current Railway Regulation Act (Eisenbahnregulierungsgesetz; ERegG), only standard capital market criteria are applied. The draft also contains further additions to the ERegG, including a passage that ensures that maintenance grants from the Federal Government can have a direct impact on reducing train-path prices. As the changes should already take effect for the 2026 train-path pricing system, the BMV is aiming for a legislative decision by fall 2025.

Implementation of Master Plan for Rail Freight Transport

The implementation of the Master Plan for Rail Freight Transport is continuing. 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 Guideline.

€ 275 million has been earmarked for train-path price support in the draft Federal budget for 2025, while € 35 million is earmarked for facility price support. The grants are already being provided to this extent under the preliminary budget management.

The amended guideline for the Federal Future of Rail Freight Transport program to promote rail innovation (Zukunft Schienengüterverkehr; Z-SGV) came into force on January 1, 2025, and will remain in place until the end of 2029. With the Z-SGV, ideas for modernization in rail freight transport in the areas of digitalization, automation and vehicle technology are to be rendered applicable and placed on the market more quickly. € 20 million has been earmarked for 2025 in the draft Federal budget.

Support for single wagon transport

Support for operating expenses has been provided since 2024. In 2024, a sum of € 300 million was available in the Federal budget, and € 300 million has also been earmarked in the budget for 2025. DB Cargo is advocating the early evaluation of the funding guideline and the establishment of a disbursement mechanism so that the funds can be utilized in full. Not all of the available funds were accessed in 2024 due to system limitations. These could be made available as additional ­expenditure reserves in 2025.