Railway sector: Commission approves EUR 1.9 billion German State aid for DB Cargo, subject to restructuring plan
Today, the European Commission (Commission) has concluded that a German state aid measure of EUR 1.9 billion in favour of DB Cargo, a rail freight operator and a wholly owned subsidiary of the State-owned Deutsche Bahn AG (DB AG), is in line with state aid rules. Following a competitor’s complaint, the Commission launched an in-depth investigation in January 2022 into four measures:
- the open-ended profit and loss transfer agreement through which DB AG has covered DB Cargo’s losses since 2012;
- the provision of intra-group services by DB AG to DB Cargo at potentially favourable terms;
- advantageous group financing conditions;
- the partial coverage by the German Federal Railway Fund of remuneration for civil servants formerly employed by Deutsche Bundesbahn and now allocated to DB Cargo.
The Commission found that the profit and loss transfer agreement involved state aid, which will be discontinued as of 1 January 2025. It concluded that the other three measures do not constitute state aid, as intra-group agreements and loans were part of ordinary business transactions and the civil servants’ remuneration was aligned with market conditions. Assessing the state aid within the framework of the Guidelines on rescue and restructuring aid, the Commission determined the measure is compatible with the internal market, based on DB Cargo’s restructuring plan aimed at streamlining activities and reducing costs to ensure long-term viability by the end of 2026. Furthermore, Germany committed to divest certain activities and assets to mitigate any distortion of competition.
The non-confidential version of the decision will be made available under the case number SA.50952 in the State aid register.