UIRR — 2022-10-20
News from Brussels
The functioning of European supply chains is being put at risk by increasing energy prices. There is a significant risk of a collapse of supply chains which rely heavily on rail freight for transportation due to unsustainable energy and transportation costs. The informal meeting of the Council of European Transport Ministers of 20-21 October should agree that Regulation (EU) 2022/1854 on an emergency intervention to address high energy prices will be applied to traction electricity used by freight trains.
The recently adopted Council Regulation (EU) 2022/1854 on capping energy prices allows Member States to use surplus revenues resulting from the application of the cap on market revenues to finance measures in support of final electricity customers that act in the greater interest of society and the economy.
Rail freight competes with long-distance trucks. The price of diesel fuel used in these trucks increased by 70%, whereas the cost of electricity that powers freight trains has gone up 300-1000% depending on the Member State. Considering the superior energy efficiency of electric freight trains as compared to long-distance trucks, and the benefits of the resulting very small carbon footprint, the need to designate electric rail freight as a final consumer group to be supported under Regulation (EU) 2022/1854 is essential.
It must be recognized that rail transport is one of the biggest consumers of electricity in Europe. Rail freight is particularly exposed to increased electricity prices compared to other modes of transportation and the current energy crisis is threatening the existence of the railway sector and their customers.
Without further action by the European Institutions and Member States, it is expected that prices for rail freight will experience a significant double digit price increase over the coming weeks. This will undermine Europe’s modal shift objectives and damage the functioning of critical rail freight supply chains which are dependent on a stable price and supply of electricity.
A further compensatory opportunity is offered by extending Regulation (EU) 2020/1429 on measures for a sustainable rail market in view of the COVID-19 outbreak, or alternative measures, which allows Member States to waive, reduce and defer track access charges until the end of 2024. Such measures could also assist rail freight undertakings in compensating for increased energy prices. The European Commission should explore options to ensure there is a European roll-out of reduced infrastructure charges with appropriate compensation by Member States towards infrastructure managers.