EC approves state aid scheme for German public transport

state aid schemeThe European Commission has approved a EUR 300 million German state aid scheme for the period 2020-2023 to support innovative projects aimed at strengthening sustainable public transport through investment and innovation. The scheme will contribute to the achievement of the EU’s environmental and climate goals, without unduly distorting competition.

With this scheme, “Germany will support innovative projects that will contribute to the transition from private motorised transport to sustainable local public transport. The scheme will foster the reduction of carbon emissions through sustainable mobility and the rolling out cleaner and cheaper forms of public transport, in line with the important objectives of the European Green Deal,” Executive Vice-President Margrethe Vestager, in charge of competition policy, said.

Germany has notified the Commission of its plans to introduce a state aid scheme to support local public transport in Germany. The scheme is expected to increase coordination of local public transport and further improve the modal split through the distribution of transport over different transport modes, in favour of local public transport.

Support under the scheme will be accessible to innovative projects aiming at favouring public transport over other more polluting means of transport and to promote the transition from private transport to more climate-friendly sustainable public transport. This is particularly important, given the increasing innovation gap and funding gap identified by Germany in this area.

The EC assessment found that the measure is necessary and proportionate since the amount of aid is limited compared to the overall cost of local public transport in Germany, worth EUR 24.5 billion per year. Furthermore, the maximum aid per project is set at EUR 30 million and a recovery mechanism is foreseen in the event of non-compliance by the selected projects with the eligibility conditions following the granting of the aid.

The measure has an incentive effect since the projects would not be carried out in the absence of the public support and that the scheme will contribute to the coordination of local public transport, the EC says.

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