The European Commission approves aid granted by the Italian region of Emilia Romagna to rail freight transport as aid for coordination of transport.

A recent application of the Community guidelines on State aid for railway undertakings by the European Commission can be find in the case N 483/2009- Italia Regione Emilia Romagna-Aiuti a favore del trasporto ferroviario merci. In this decision the Commission assessed aid granted in favour of rail freight transport by the Italian region of Emilia Romagna on the basis of chapter six of the Guidelines. Eventually the Commission hold that the aid was compatible with the internal market and authorized it. The decision is worth reading for it gives an insight into the relevant elements for the Commission in assessing aid to rail. Before doing that, a short summary of the aid in question will be given.
The aid is aimed at rebalancing the freight transport sector by incentivizing rail transport and intermodal transport services, namely those supplied with complete or block trains. Any rail service further than those operated the year before applying for aid and with point of origin/destination within Emilia Romagna is eligible. Rail undertakings and logistic operators are allowed to apply for aid. The amount of financial contribution to be granted to successful applicants is calculated on the basis of the higher external costs sustained by rail by comparison to other modal carriers. In this way the aid will reduce the costs incurred by final users of rail freight transport services. In this regard, aid recipient have to deduct the payment they have received from the fares charged on customers. Ceiling of aid is to 30% of the total costs of freight rail transport.
The aid in question is considered by the Commission as aid for coordination of transport and then assessed under the chapter six of the Guidelines. To start, the objectives of the aid are consistent with those of the Commission transport policy. The aid is aimed to shift freight from road to rail, thereby lessening the environmental impact of freight transport services and road congestion. As regarding the proportionality of aid, the amount of money to be given to aid recipients, as a compensation for the higher external costs bore by rail, is determined on the basis of calculations of the Marco Polo programme, consistently with the Commission practice. The realistic prospects of keeping the traffic transferred to rail required by the Guidelines is considered to be met on the basis of two factors. First because of the underutilization of block train services in Emilia Romagna, there exist a considerable potential for them. The second relevant factor is the commitment aid recipients have to undertake to operate the funded additional services for at least two years. Finally, no distortive effects of competition is expected because of the aid in question. Instead, it contributes to achieve a level playing field between rail and road carriers with regard to or costs. Neither the exclusion of traditional train services from eligibility for aid would have anticompetitive effects due to the marginal role of this type of services within the rail sector.

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