The new EU Emissions Trading System will be presented at the end of this week by the European Commission, and eight associations are urging it to assign some of its revenue to the rail industry. “Rail is not asking to be exempted from the ETS, but asks that some of what it pays returns to support the use of its capacity”, said a joint statement.
EU ETS are permits that companies buy to make up for their emissions, generating 43 billion euros in 2025. UIRR, ERFA, CER, EIM, AERRL, ALLRAIL, UIP and UNIFE argue that some of that revenue should go to rail projects, as the industry only contributes to less than 1% of transport greenhouse gas emissions. To achieve this, there should be “ a move from discretionary good practice to a clearer obligation”.
Two priorities
The eight parties are thus advocating for two priorities. The first one is to increase the attractiveness of rail for both freight and passengers through the ETS Innovation Fund. In concrete, this would mean assigning funds to rail electrification projects, cross-border initiatives (DAC, ERTMS and FRMCS and the development of innovative technologies.
The second priority is “a modal shift support drive” through the ETS Investment Booster and the ETS Industrial Decarbonisation Bank. Shifting goods to rail and combined transport would bring immediate benefits in terms of emissions reduction. “The ETS revision must uphold the polluter pays principle as well as competitive fairness”, the joint statement added.
Stricter rules on how to assign ETS funds should benefit rail both at national and EU level. They are not the first ones asking for a more regulated allocation of ETS funds, particularly when it comes to the modal shift. In 2022, the Italian rail freight association Fermerci asked its government to use these funds to finance the two main subsidies for this industry.