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The European Commission (EC) has given the go-ahead to a $150.2m (€133m) Swedish scheme to back rail freight and passenger industries hit by the Covid-19 pandemic.

As part of the scheme, the charges due by railway firms to utilise rail infrastructure in both sectors will be cut down.

This will help avoid the loss of market shares of rail transport, as well as promote the shift from road to rail.

The arrangement will reduce infrastructure charges due for the period from 1 March 2020 to 30 September 2021 for rail freight and passenger operators.

This scheme is expected to provide environmental benefits by reducing pollution and minimising congestion on roads.

According to the EC, the decrease in infrastructure charges comply with Regulation (EU) 2020/1429.

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By GlobalData

This guideline enables and encourages EU members to provisionally minimise, waive or defer charges for using rail infrastructure in the context of the pandemic.

Additionally, the scheme is in line with European Union State aid rules, especially the 2008 Commission Guidelines on state aid for railway undertakings.

EC competition policy executive vice-president Margrethe Vestager said: “The scheme approved today will help rail freight and passenger operators in Sweden weather the difficult situation caused by the coronavirus outbreak.

“The measure will contribute to maintaining the competitiveness of rail compared to other modes of transport, in line with the objectives of the European Green Deal. We continue working with all member states to ensure that national support measures can be put in place as quickly and effectively as possible, in line with EU rules.”

In August this year, the EC sanctioned a $644.37m (€550m) German support measure for compensating Deutsche Bahn.