Tuesday, November 3, 2020

Rail Freight Group Plays the Emissions Card in Plea for Financial Support

Covid-19 Causes Another Branch of Logistics to Call for Help
Shipping News Feature

EUROPE – As the pandemic continues to sweep through cities, devastating economies in its wake, so every industry is pleading for more support from governments. Whilst aviation is the most obvious branch of logistics seeking a panacea, this week the case for rail freight is being made by the European Rail Freight Association (ERFA).

The plea comes principally as a result of the make-up of the number and type of carriers. On average in Europe, new entrants account for 44% of national market shares of rail freight undertakings based on net-tonne kilometre. On top of this, 31% of all rail freight undertakings are non-incumbent operators, meaning they are not an incumbent operator in any European country.

The ERFA is concerned that avoidable competition distortion and damage to the industry as a whole will result if the European Commission and Member States do not supply support measures to enable this diversity which has been so long an objective of both. New industry entrants, particularly non-incumbent operators which form the majority, require legal certainty, particularly regarding State Aid, in order to be able to continue to invest and grow.

The ERFA doubtless fears that during and after the crisis countries throughout the EU will look to support only their own registered national interests.State aid of course is always a hot potato and we have seen a variety of support in the industry, both legal and illegal, over the years. Compare this to the success of China’s ‘Belt and Silk Road’ operation, that is if success means billions of dollars of support to hold up the routes. ERFA is calling for a a legal framework that ensures that support measures can only be introduced where they are fair, transparent and available to all actors.

It says any deviations from these principles will lead to investment uncertainty and, subsequently, undermine the entire industry’s ability to play its role in bringing freight transport emissions under control, and therefore asks for five measures to be enacted:

  • Non-Discriminatory Support Measures: Aid should only be admissible where it is fair, transparent and non-discriminatory. Bilateral support measures, either directly or through cross-subsidisation, have the potential to distort competition and damage existing markets.
  • Continued Monitoring and Updating of State Aid Temporary Framework: ERFA has welcomed the European Commission’s State Aid Temporary Framework. This has allowed Member States flexibility to support key industries when and where required. This Framework must remain a temporary measure and continue to be adapted to the needs of European economies. The European Commission should continue to assess and amend the provisions of the temporary framework based on the key principle that all aid allocated under the framework must be non-discriminatory.
  • Reduction and Waiving of Track Access Charges: ERFA welcomes the recent adoption of a Regulation establishing measures for a sustainable rail market in view of the Covid-19 outbreak. This Regulation gives Member States the freedom to waive and reduce track access charges. This remains the best way to support the rail freight sector in a fair and proportional manner. ERFA strongly calls on Member States to take concrete actions in line with this Regulation.
  • Creation of a Freight Transport Crisis Contingency Plan: The European Commission has already come forward with a Communication upgrading the transport Green Lanes. In order to ensure rail freight continues to operate as the backbone of freight logistics, the European institutions and Member States should move quickly on implementing the provisions of this communication and the creation of a wider Freight Transport Crisis Contingency Plan. This should ensure that regardless how the pandemic develops, cross-border freight operations along TEN-T corridors and other essential routes are protected and that transport workers can continue to move across borders. It must also ensure that terminals and other essential auxiliary services continue to operate.
  • Rail Freight in the Green Deal: Furthermore, the critical function of rail freight in the present Covid crisis must be sustained and perpetuated in view of the Green Deal objectives. Lessons learnt from the crisis should be used to create a stronger rail freight system.

ERFA President, Dirk Stahl, emphasised the points made, commenting:

“All actors in the rail freight market have been impacted by the continuing Covid-19 pandemic. We believe that support measures for the sector as a whole are crucial, but we need to ensure these measures do not undermine competition. For private and independent operators, this is essential if we are to be in a position to continue to grow. Crucially, we also need to continue to ensure that rail freight continues to move across national borders regardless of how the pandemic evolves over the coming weeks and months.”

His points were reinforced by the organisation’s Secretary General, Conor Feighan, who said:

“It is essential that Member States take a proactive approach to supporting the rail freight sector and look at proactive options such as a waiving of track access charges. This will ensure that all undertakings are supported in an equal manner and subsequently ensure rail freight can continue to become more competitive throughout and beyond the pandemic.”

Photo: Image courtesy of FerCargo.