Germany’s new draft budget for 2027 is putting rail freight at risk. Several companies and associations issued a warning, calling for more funding and reforms. RailFreight.com took a closer look at the budget plans and the road ahead.
Without reliable financing for Germany’s railways, important projects are at risk, says a broad industry initiative. Industrial rail connections, as well as regional passenger services, may suffer with the current budget plan.
In total, the identified funding gap could leave more than 90 rail projects at risk of being cancelled, the industry paper says. “In the short term, around 30 projects are not fully financed this year despite the special infrastructure fund. Looking at all the requirements of the rail network together, it becomes clear that approximately €4 billion per year is lacking to genuinely tackle the investment and maintenance backlog, including the digitalisation of the railway.”
The paper also points to cuts in investments for non-federally-owned infrastructure. This could hinder rail freight operations. As a result, the paper foresees “significant consequences” for supply chains, production processes and German competitiveness.
Infrastructure spending goes down
In Germany’s existing plan, the total budget for rail infrastructure investments would shrink by approximately €1.1 billion (from €21.9 billion in 2026 to €20.8 billion in 2027). Money comes from three sources: Germany’s special infrastructure fund, the transport budget and the defence budget.
Berlin is planning its biggest budget cut in the special infrastructure fund. A category relating to construction cost subsidies and network maintenance will shrink from €16.3 billion in 2026 to around €11.5 billion in 2027. The government also allocates less money for ETCS implementation: €2.22 billion (€2.45 billion in 2026).
By contrast, the transport budget is growing ever so slightly to around €3 billion (€2.7 billion in 2026). The vast majority of this money is also classified as construction cost subsidies, but these are earmarked for new infrastructure and expansions. The money allocated for this amounts to slightly over €2.2 billion. This is around €400 million more than this year.
Other expenditures from the transport budget include noise reduction measures, as well as measures for congestion relief, an integrated freight timetable and electric freight operations. Lastly, Germany will spend €4.2 billion from the defence budget on rail projects.
The big picture
All in all, across the various financing sources, there is a reduced budget for the existing network. When factoring in all funding, it amounts to €15 billion instead of €16.3 billion (2026) according to Deutsche Bahn. A total of around €3 billion is planned for the infrastructure development plan in 2027 (an increase of €0.5 billion compared to 2026), and €2.2 billion for digitalisation (a decrease of €0.2 billion compared to 2026).
Besides infrastructure funding, the transport budget also unveils preliminary plans for operational support to rail. The picture here looks very dire. No category can count on additional funding. Rather, they also face cuts: track access charge (TAC) subsidies, single wagonload support, innovation support, non-federal railway investments, combined transport and private sidings all face a reduction in federal support.
German rail freight support schemes face cuts in 2027
| Programme | 2027 | 2026 | Change |
|---|---|---|---|
| Rail freight track-access-charge support | €200.258m | €265m | -24.4% |
| Single-wagon transport support | €274m | €384m | -26% |
| Rail freight innovation | €39.237m | €45.877m | -14.5% |
| Investment in non-federal railways used for long-distance freight | €46m | €66m | -30.3% |
| Combined transport investment | €73.304m | €90.3m | -18.8% |
| Private sidings and other rail freight facilities | €20m | €30m | -33.3% |
Germany’s industries want to prevent the negative effects of the current budget plan. To that end, they issue an appeal to the government. The paper’s signatories want an additional €4 billion annually to upgrade railways and build new ones. The maintenance budget gap must also be addressed, they say.
Much like earlier industry appeals, the paper calls for multi-year funding commitments by the German federal government. It should also reform the TAC system, continue the provision of subsidies and reduce the charges permanently. Additionally, “single wagonload transport must be permanently secured as the backbone of industrial logistics and value chains.” The paper argues for a minimum of €350 million annually for this purpose.
What is next?
The German parliament will hold a four-day first reading on the budget between 8 and 11 September. A period of budget committee scrutiny follows, with the transport budget on the agenda on 4 November. Recommendations to change parts of the budget could be issued on that day. After the second and third parliamentary readings, a final vote on the budget is scheduled for 27 November.