The European Commission has approved two German schemes worth over $2.97bn (€2.5bn) to support the rail freight industry and the long-distance rail passenger sector, which have taken a hit due to the Covid-19 pandemic.

The two schemes, which have been sanctioned under EU state aid rules, will help in moving the freight and passenger traffic from road to rail.

Under the arrangement, charges paid by railway firms for using rail infrastructure in freight, as well as the long-distance rail passenger segments, will be reduced.

The aim is to avoid the loss of market share for rail transport to other modes of transport.

With an estimated budget of $2.49bn (€2.1bn), the first scheme will cut down around 98% of the infrastructure charges paid by long-distance rail passenger operators from 1 March 2020 to 31 May 2022.

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The second scheme focuses on altering an existing scheme from 2018 supporting German rail freight operators.

With a projected budget of $486.83m (€410m), this amendment will raise the aid for nearly 98% of the infrastructure charges paid by rail freight operators from 1 March 2020 to 31 May 2021.

This scheme is in line with a similar budget increase for the period from 1 June to 31 December 2021, which was sanctioned by the Commission last May.

The European Commission said in a statement: “The Commission found that the measures are beneficial for the environment and for mobility as they support rail transport, which is less polluting than road transport, while also decreasing road congestion.”

It further noted that the infrastructure charges reduction has been framed as per the Regulation (EU) 2020/1429.

The regulation permits and promotes EU members to provisionally authorise the reduction, waiver, or deferral of charges below direct costs for using rail infrastructure.

European Commission executive vice-president and competition policy in-charge Margrethe Vestager said: “The measures approved today will help rail freight and passenger operators in Germany weather the difficult situation caused by the coronavirus outbreak.

“The measures will contribute to maintaining the competitiveness of rail compared to other modes of transport, in line with the objectives of the European Green Deal.”