Eight European rail and intermodal organisations have urged the European Commission to ensure EU ETS revenues support rail investment and accelerate transport decarbonisation.
A coalition of Europe’s leading rail and combined transport organisations has called on the European Commission to ensure the upcoming revision of the EU Emissions Trading System (EU ETS) strengthens investment in rail as the continent’s lowest-emission form of mass transport.
Ahead of the Commission’s proposal on 17 July 2026, the organisations argue that the revised ETS should direct a greater share of carbon pricing revenues towards rail infrastructure, rolling stock and technologies that enable passengers and freight to shift from higher-emission transport modes.
The joint statement comes as the European Union prepares to align the ETS with its 2040 climate objectives while supporting industrial competitiveness. The organisations argue that rail already delivers significant emissions savings and should therefore receive greater financial support through the system.
Rail seeks greater investment from ETS revenues
According to the statement, more than 80% of rail traffic across the European Union is already electrified, while rail accounts for less than 1% of transport greenhouse gas emissions. The organisations argue that moving passengers from private cars and short-haul aviation to rail, alongside transferring freight from road to rail and combined transport, delivers immediate carbon reductions without waiting for new technologies to mature.
However, they note that electrified rail operations already bear indirect ETS costs through electricity pricing. They estimate that electrified rail transport currently incurs around €571 million annually in ETS-related costs across the EU, a figure that could exceed €790 million each year if carbon prices rise as projected by 2027.
Rather than seeking exemption from the scheme, the organisations are calling for a proportion of ETS revenues to be reinvested into the rail sector.
They argue that funding should support passenger rail services, freight corridors, electrification projects, terminal and depot upgrades, traction power supply, rolling stock modernisation and digital capacity management tools.
The statement also highlights the importance of strengthening Europe’s intermodal freight network. Around 1,000 daily intermodal freight train departures currently connect approximately 1,300 terminals across Europe, enabling freight to shift from road to rail. Despite this progress, the organisations say rail freight remains well below the European Union’s objective of achieving a 30% modal share by 2030 because of infrastructure constraints, interoperability challenges and insufficient investment.
The coalition is also calling for the ETS Innovation Fund, Modernisation Fund, Social Climate Fund and future ETS investment mechanisms to prioritise projects that deliver measurable carbon reductions through rail.
Recommended investment areas include expanding rail electrification, improving cross-border interoperability, deploying technologies such as the European Rail Traffic Management System (ERTMS), Future Railway Mobile Communication System (FRMCS) and Digital Automatic Coupling (DAC), as well as increasing rail connections to ports and logistics hubs.
The organisations argue that combining innovation in other transport modes with a stronger modal shift towards rail would accelerate freight decarbonisation more rapidly than relying solely on technological improvements elsewhere.
The joint statement concludes that the revised ETS should continue to uphold the polluter pays principle while ensuring competitive fairness across transport modes. Reinvesting carbon revenues into rail, the organisations argue, would strengthen European competitiveness, improve freight and passenger transport, and help deliver the European Union’s long-term climate and sustainability objectives.
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