National environment
DB Group
Implementation of common good-oriented infrastructure
Since the end of 2023, DB InfraGO AG has been the common good-oriented infrastructure subsidiary 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 be managed, planned and further developed from a single source in the future. The quality, capacity and stability of railway operations will be improved continuously. This will create the conditions for achieving the objectives 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 elements: creation of the high-performance network, maintenance and modernization of the other parts of the network, rapid expansion of capacity, 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 more 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 German Federal Rail Infrastructure Extension Act.
- The third pillar will re-establish the financing framework. The financing architecture of the various funding pools is to be simplified based on the recommendations of the Rail Acceleration Commission. In addition, 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 (LuFV) needs to be developed further.
- With the fourth pillar, the Federal Government intends to further develop the management of the infrastructure.
- The fifth pillar includes the organizational merger of DB Netz AG and DB Station&Service AG.
Procedure for the Federal Budget 2024
On July 5, 2023, the Federal Government approved the draft for the 2024 Federal budget and the financial plan to 2027. The budget of the Federal Ministry for Digital and Transport (Bundesministerium für Digitales und Verkehr; BMDV) includes about € 11.5 billion more than previously planned for rail in the period from 2024 to 2027. The additional funds relate to both track infrastructure and other support programs for the competitiveness and innovations of train operating companies (TOCs) in rail freight transport, including support for single wagon transport.
On August 9, 2023, the Federal Government concluded the 2024 budget plan for the Climate and Transformation Fund (Klima- und Transformationsfond; KTF) and the financial plan to 2027. A new budget item will be created to support capital expenditures in the railway infrastructure of the Federal Government’s rail infrastructure companies (RICs) and will be allocated funding of € 4 billion in 2024. The financial plan up to 2027 totals € 12.5 billion for this budget item.
On November 15, 2023, the Federal Constitutional Court announced that the Second Supplementary Budget Act 2021 was incompatible with the Basic Law and was void.
In December 2023, the Federal Government reached an agreement on the key points for a revised KTF and on adjustments to the core budget to cover the shortfall in cover resulting from the ruling. The agreement stipulates, among other things, that the funds provided for the track infrastructure in the government draft of the KTF will be omitted and additional funds will be made available through equity increases instead. Additions worth € 20 billion overall are planned in the period from 2024 to 2029, of which tranches worth € 5.5 billion are intended for both 2024 and 2025. In the context of budgetary consolidation, the Federal Government’s agreement also stipulates that savings amounting to € 380 million will be made in the BMDV budget.
On February 2, 2024, the Federal budget for 2024 was approved.
Implementation of the Rail Acceleration Commission
On December 13, 2022, the Rail Acceleration Commission presented its final report under the direction 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. The creation of a high-performance network through the general modernization of highly utilized lines is proposed. The Commission has developed a list proposal of 89 measures that can be implemented in the short term, focusing on control points. The aim is to achieve faster approval processes, in particular through legislation modeled on the energy sector – by enshrining in law the overarching public interest in rail expansion, for example. To reduce the complexity of track infrastructure financing, a new financing architecture is recommended that summarizes financing sources and uses proportions of additional income from truck tolls. On June 20, 2023, the BMDV submitted the first progress report on the implementation of the recommendations of the Rail Acceleration Commission. According to this, 17 recommendations are currently being implemented. The implementation of 27 further recommendations is being prepared. Several of the recommendations require amendments to existing laws. Some recommendations of the Rail Acceleration Commission have already been taken into account in legislative procedures. For example, the recommendations on the overarching public interest have largely been implemented and those on truck tolls have been implemented in accordance with the proposal.
The BMDV has announced a government draft for the first half of 2024 for the Modern Railway Act recommended by the Rail Acceleration Commission for the combined implementation of its proposals.
Development of energy price brakes
The Federal Government is using a financial “defensive shield” to reduce rising energy costs and the worst consequences for consumers and companies. To this end, the Economic Stabilization Fund (Wirtschaftsstabilisierungsfonds; WSF) for 2022 was provided with additional lines of credit amounting to € 200 billion. This was used for financing the gas and heat price brakes and the electricity price brake. The required laws (Electricity Price Brake Act and Natural Gas and Heat Brake Act) entered into force in December 2022. On this basis, rail transport was also protected against sharply increasing energy prices. Reference prices were applied for a “relief quota” of 90% of the consumption volume.
The WSF is also affected by the ruling of the Federal Constitutional Court on the KTF, as credit loans from the previous year can no longer be used in the WSF. As a result, the electricity price brake and the natural gas heat price brakes subsequently expired on December 31, 2023.
Draft amendment to the German Federal Climate Protection Law
On June 21, 2023, the amendment to the Federal Climate Protection Law was passed. 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. 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.
Resolution on 2023 climate protection program
On October 4, 2023, the German Federal Government approved the Climate Action Program 2023, which 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, the acceleration of climate neutrality for passenger cars, renewable energies and the electrification of air and ocean transport, digitalization, spatial and traffic planning as well as mobility management, the topic of rail transport and strengthening urban and regional transport was addressed.
With regard to rail, the German Federal Government confirms its intention to provide considerable funds in the coming years to modernize and expand the rail network. Priority will be given to increasing the capacity of the core network. The additional capital expenditure requirement by 2027 is expected to be about € 45 billion. To the extent financially feasible, this is to be covered, among other things, by the use of a share of the income from the CO₂ surcharge on the truck toll. In addition to strengthening the capital expenditures for rail, measures include strengthening and digitalizing the existing network, strengthening rail freight transport and a digitalization package for rail.
Extension of truck tolls
On October 20, 2023, the Third Act Amending Toll Regulations was passed. It provides for the reduction of the toll limit for vehicles with a permissible total weight of more than 3.5 t (previously: at least 7.5 t) from mid-2024 and pricing of CO₂ emissions from December 2023. From 2024 to 2027, the Federal Government expects toll income totaling about € 64 billion. According to the law, half of the total toll income is to be used for mobility measures – and for the most part for Federal rail infrastructure.
Passenger transport
Introduction of the Germany-ticket
The Germany-Ticket, which is valid on local public transport throughout the country, was launched on May 1, 2023, at a price of € 49 per month. An initial interim assessment shows a high level of acceptance among customers and intensive use: in December 2023, about ten million people held Germany-Tickets. About 4% of users were new customers. Since the introduction of the Germany-Ticket between May and December 2023, DB Regional has recorded a monthly average increase in passengers of about 16% in comparison with the two months before the introduction of the Germany-Ticket.
During the Minister-Presidents’ conference on November 6, 2023, the Federal Government and the Federal states agreed on financing for 2024. For this purpose the Regionalization Act is to be amended and the unspent funding for 2023 transferred to the following year.
The previously valid financing of the Germany-Ticket until 2025 was passed under the Ninth Act Amending the Regionalization Act in March 2023. The Federal Government and the Federal states therefore bear half of the costs for the Germany-Ticket at € 1.5 billion per year in the period 2023 to 2025. Any additional costs incurred by the transport companies during the introduction of the Germany-Ticket in 2023 are also half compensated by the Federal Government and the Federal states. 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 year until 2025. This 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 dynamic use of regionalization funds, which was increased from 1.8% to 3.0% from 2023.
Implementation of 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, about 180 infrastructure 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 November 24, 2023, the Upper House of Parliament (Bundesrat) passed a corresponding amendment to Appendix 1 of the German Federal Rail Infrastructure Extension Act (Bundesschienenwegeausbaugesetz; BSWAG).
At the end of April 2023, the BMDV began the stakeholder dialog to update the target schedule for Germany in sync. The target schedule will be adapted to the changing needs of the users, including concepts for regional rail passenger transport.
At the beginning of November 2023, a new working committee was set up by the BMDV with a project conference in line with Germany in sync for closer cooperation between the Federal Government, the Federal states and DB Group in the expansion and construction of the rail network. The annual project conference is intended to better synchronize measures from the Federal Government and the Federal states to implementt Germany in sync and speed up planning.
Implementation of the EU Passenger Rights Regulation
The EU 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 implemented by amending the railway traffic ordinance (Eisenbahn-Verkehrsordnung; EVO) and the General Railway Act (Allgemeines Eisenbahngesetz; AEG): on June 16, 2023, the Upper House of Parliament (Bundesrat) approved the draft law amending the AEG. The amended EVO was approved on July 7, 2023. The existing delay thresholds of 60 minutes and 120 minutes and compensation amounts of 25% and 50% of the ticket price will continue to apply to the compensation regulations. The Germany-Ticket is classified as a significantly discounted ticket, which eliminates the right to use higher-value trains after a delay of 20 minutes. In addition, the industry will be required to establish a single point of contact for passengers with mobility restrictions from January 1, 2025. DB Group already operates the Mobility Services Center.
Infrastructure
In addition to the developments described above, such as developments regarding the Federal budget and the common good-oriented infrastructure unit, several legislative procedures are relevant to the infrastructure sector, which are explained below.
Amendment to the Federal Rail Infrastructure Extension Act
On June 7, 2023, the Federal Cabinet passed the Government’s draft of a Fourth Act Amending the BSWAG. The BSWAG is the legal basis for capital expenditures on Federal rail infrastructure. With the amendment, the Federal Government intends to remove existing capital expenditure barriers and strengthen the performance capability and availability of track infrastructure. The cabinet draft creates new financing options by opening up public funding to non-capital expenditure elements. In future, maintenance expenses can also be funded by the Federal Government, as are one-time expenses (e.g. decommissioning, IT services) and follow-up costs of measures initiated by the Federal Government. The current legislative procedure has not yet been completed as of the end of 2023.
Acceleration of approval procedures
On November 24, 2023, the Law to Accelerate Planning and Approval Procedures in the Transport Sector and implementing Directive (EU) 2021/1187 on Streamlining Measures for Advancing the Realization of the TransEuropean Transport Network (TEN-T) was passed with the approval of the Upper House of Parliament (Bundesrat). For rail, overarching public interest in numerous infrastructure projects (including all projects of the rail requirement plan and the Municipal Transport Financing Act) has been established. The law is intended, among other measures, to speed up exemptions in the area of wildlife conservation. Paperless public participation will be facilitated for all rail-related plan approval procedures. Terms will also be introduced for plan approval procedures on TEN-T corridors. In addition, the reporting date for noise reduction carried out in the last legislative period is being expanded, which is intended to avoid more planning than previously in current plan approval procedures. The law includes a commitment to audit the use of railway facilities for the production of renewable energies.
German 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 re-planning, 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. The plan approval procedures themselves are to be accelerated by introducing a so-called consent fiction when official participation deadlines expire. Further acceleration legislation is to be implemented in order to implement the pact. Initial results are expected to be available in the first quarter of 2024.
Resolution of Infrastructure Acceleration Act
On February 10, 2023, the German Parliament passed the law to accelerate administrative court proceedings in the area of infrastructure (VwGO), 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.
Freight Transport
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 issues from the Master Plan for Rail Freight Transport are also included in the Master Plan for Rail Transport. Significant funding instruments for rail freight transport include 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.
Since 2018, train-path price support has been in place to relieve rail freight transport. In June 2023, the European Commission approved the corresponding funding guidelines, which had been set to expire on June 30, 2023, for the period from July 1, 2023 to November 30, 2024. In December 2023, the European Commission announced an extension and expansion of train-path price support in the amount of up to € 350 million per year until November 2028.
Promotion of single wagon transport
In order to strengthen single wagon transport, the Federal Government has been promoting facility pricing in the area of train formation since 2020. In 2023, the total amount available was € 85 million. In the 2023 Federal budget, the Federal Government also created the financial conditions for further support for single wagon transport with a new budget item, with an allocation of € 80 million. However, this payment was not made. In the 2024 Federal budget, the item is being increased to just under € 300 million. In order to implement and pay out the funding, a funding guideline is required, which is expected to be published in the first half of 2024. The budget item to promote asset prices will be endowed with € 20 million in 2024, meaning that a total of almost € 320 million is available for the promotion of single wagon transport in 2024.
