Europe has found itself in an energy crisis. In order to curb the impact, the European Commission has devised somewhat of a plan. It involves a limit on electricity taxes, which will inevitably be reflected in the rail freight cost picture. RailFreight.com dug a bit deeper, what have we learned?
The European Commission announced a policy package, AccelerateEU, that combines several measures to get the Union through the energy crisis. One measure struck RailFreight.com as particularly interesting: the Commission wants to make sure that electricity taxes in Europe cannot exceed the taxes on diesel.
In other words, the Commission wants to limit electricity taxes to stimulate more sustainable energy. Since electricity prices are a major expenditure for rail freight, lowering them could help improve competitiveness and widen profit margins. Most importantly, this would disadvantage the diesel-dominated road sector, the main competitor of rail freight.
The head of the Dutch rail freight association RailGood, Hans-Willem Vroon, underlines the importance of lower electricity prices: “In this way, the most sustainable mode of transport is stimulated fairly. That is much better than subsidising the modal shift.” In the Netherlands, most rail freight takes place on electrified railways, except for particular first mile and last mile routes and regional stretches of rail. This is applicable to many European countries: around 60% of all railways are electrified.
What difference would it make?
Clearly, shrinking electricity taxes below the diesel tax level would be a good idea for rail. However, a quick look at European taxation policies reveals that electricity taxes are already lower than diesel taxes as a share of the total price. This is true, at the very least, for Poland, the Netherlands, France, Germany, Italy, Spain and Hungary based on Eurostat data and numbers from the UK-based Royal Automobile Club, an automotive services company.
The effective tax rates differ depending on the method of calculation (for example, including or excluding VAT and recoverables), but the rate for diesel is always higher than the one for electricity as of late April 2026. The largest margin between the two is found in France, including VAT and recoverables: 75.65%, whereas the equivalent tax rate for electricity stands at 25.96% — a difference of nearly 50%.
By contrast, the smallest margin between the two is found in Poland when excluding VAT. The rate sits at 38.46% for diesel and 35.09% for electricity for non-household consumers. This is a difference of 3.37%. It stands to note that Poland has one of the highest electricity tax rates in the EU. Still, electricity taxes are lower than their diesel-targeting counterparts.
A security measure at best
In other words, the Commission’s planned measure to — supposedly — cap electricity taxes at the diesel tax rate will not immediately lead to lower electricity prices. The Commission was not willing to explain the goal of the proposal, saying that there are “no further details to share” while the measure remains at the proposal stage. However, it repeats its intention to ensure that “electricity is taxed less than fossil fuels.”
Ultimately, the measure’s details will decide its impact on rail freight, but an immediate cost relief seems rather unlikely. Still, it will make sure that EU Member States cannot lower diesel taxes indefinitely without taking similar measures for electricity. That could provide a security measure for rail freight, just in case the EU members get too enthusiastic about supporting their trucks.