Regulation

Changes to the legal framework at the national or European level could pose risks to our business. This general regulatory risk could therefore result in tangible negative effects on profit and loss.

These regulations govern, among other things, the individual components of the pricing systems and general terms and conditions applied by our rail infrastructure companies. There are risks of complaints and intervention in this regard. Measures that threaten or even prevent DB Group from attaining reasonable yields in its infrastructure business units (such as an intervention in pricing systems) can therefore threaten financing contributions by DB Group to capital expenditures in infrastructure.

With regard to the infrastructure pricing systems, there are considerable risks for the TOCs in long-distance and freight transport. This is mainly due to the limitation of fee increases in regional rail passenger transport. In accordance with the Railway Regulation Act, the development of fees is linked to the dynamization of regionalization funds, which was increased from 1.8% to 3.0% from 2023. As part of the Ninth Act to Amend the Regionalization Act, it was decided in March 2023 that the increase in train-path and station fees in regional rail transport will be set at 1.8% per year until 2025, contrary to the regulation in the Railway Regulation Act. This cap leads to a disproportionately large increase in train-path usage fees for long-distance and freight transport.

For 2025, the limitation of regional rail passenger transport dynamization results in an effective increase in fees of 16.2% for rail freight transport and 17.7% for long-distance rail passenger transport. The draft Federal budget for 2025, which forms the basis for the provisional budget for 2025, includes funding to compensate for these effects, although this does not cover the requirements in full. The final amount of funding for 2025 will not be clear until the 2025 Federal budget. Further significant risks for the TOCs could arise in the context of the 2026 train-path pricing system if the costs of the implemented and planned equity measures for DB InfraGO AG are factored into the pricing. The Federal Government and DB Group are working on an equalization mechanism to regulate the cost effects in such a way that the costs incurred as a result of the equity injection do not lead to a burden on the TOCs. Whether an equalization mechanism can be implemented is open due to the non-adoption of the 2025 Federal budget. The consequences of an equity-related increase in charges would again have to be borne by the train operating companies in long-distance rail passenger transport and rail freight transport due to the capping of fees for regional rail passenger transport.

The legality of the regional rail passenger transport fee cap is currently being reviewed: in mid-April 2024, DB InfraGO lodged an appeal against the determination of charges for regional passenger rail transport in the TPS 2025 in accordance with Section 37 (2) of the Railway Regulation Act in conjunction with Section 5 (10) of the Regionalization Act. Several access right holders have also filed complaints. In the proceedings of DB InfraGO, the Administrative Court of Cologne is referring the question of the admissibility of the regional rail passenger transport price brake to the European Court of Justice: the Administrative Court of Cologne is of the opinion that the calculation of charges for regional rail passenger transport specified in the Railway Regulation Act restricts the scope for action of DB InfraGO contrary to EU law and violates its independent management as set out in the Recast Directive. Should the cap in regional rail passenger transport be contrary to European law, the linking of regional rail passenger transport fee dynamization to the annual rate of increase in regionalization funds could be dropped. This would lead to a sharp increase in regional rail passenger transport train-path usage fees and, without compensatory measures, would place a considerable burden on the Federal states’ budget for regional rail passenger transport orders, which could result in significant economic risks for DB Regional. A court decision is not expected before the end of 2025.

If the risks described materialize with disproportionate increases in fees for the train operating companies, this would have a significant negative impact on the business models of the train operating companies in these segments. A significant increase in train-path prices would lead to a marked deterioration in the results of all DB Long-Distance sub-networks and would bring into question the economic viability of individual transport services. The overall structure of the schedule, vehicle and maintenance needs would have to be fundamentally reassessed. This would make it possible to implement Germany in sync only in a significantly reduced form.

Political risks concern in particular a tightening of existing standards and regulations affecting the railways. The structure of DB Group as an integrated group is also exposed to risks.

With regard to risks arising from changes in the legal and regulatory framework at a national and international level, we actively contribute our position to the preceding consultations and discussions. If political or regulatory risks occur, countermeasures are implemented at the corporate level, where possible, in order to minimize the potential negative effects on corporate goals and traffic growth.

Opportunities result from the promotion of green mobility and logistics, including to achieve Government climate protection targets.