EU ETS revenues should be reinvested into rail infrastructure, according to eight European rail organisations. In a joint statement, they urged the European Commission to direct part of the carbon market’s income towards freight corridors, intermodal terminals and rail infrastructure.
The call comes ahead of the European Commission’s planned revision of the European Union Emissions Trading System (EU ETS), expected on 17 July. The proposal aims to align the carbon market with the EU’s 2040 climate targets while strengthening Europe’s competitiveness.
Rail groups seek EU ETS revenues
The organisations said the EU ETS should do more than place a price on carbon emissions. They want EU ETS revenues to support investments that strengthen passenger and freight rail across Europe.
Rail already delivers strong environmental benefits, the organisations noted. More than 80% of rail traffic in the European Union runs on electrified lines. Meanwhile, rail accounts for less than 1% of transport-related greenhouse gas emissions.
Despite that performance, electrified rail still faces indirect EU ETS costs through higher electricity prices. The organisations estimate those costs at around €571 million per year across the EU27, based on a carbon price of €79.36 per tonne of CO₂.
They also warned that costs could rise further. If the carbon price reaches €110 per tonne in 2027, annual indirect costs could exceed €790 million.
Rather than asking for exemptions, the organisations want the European Commission to reinvest EU ETS revenues into projects that improve rail infrastructure and services.
How EU ETS revenues could support freight rail
The organisations identified several investment priorities. These include freight corridors, intermodal terminals, terminal and depot electrification, traction power supply, rolling stock modernisation and digital capacity tools.
They believe these investments would remove infrastructure bottlenecks. They also say they would encourage more freight to move from road to rail.
The statement highlights the scale of Europe’s combined transport network. Around 1,000 intermodal freight trains operate every day and connect approximately 1,300 terminals across Europe.
According to the organisations, shifting freight from road to rail can reduce energy use per tonne-kilometre by up to 70%. It can also lower greenhouse gas emissions by 60% to 90%.
Rail freight still faces major challenges
Despite its environmental advantages, rail freight remains well below the European Union’s target of achieving a 30% market share by 2030.
The organisations identified several barriers to growth. These include limited rail capacity, insufficient freight train paths, infrastructure that cannot accommodate 740-metre trains, cross-border interoperability challenges and underinvestment in intermodal terminals.
To address these challenges, they urged the European Commission to prioritise rail projects through existing and future funding instruments linked to EU ETS revenues. These include the Innovation Fund, Modernisation Fund, Social Climate Fund and ETS2.
The joint statement was signed by eight leading European rail organisations representing infrastructure managers, freight operators, rolling stock owners, manufacturers and intermodal transport companies.
What EU ETS revenues could mean for ports
Although the statement focuses on rail policy, its proposals could also affect ports and logistics if they are reflected in future EU funding decisions.
More investment from EU ETS revenues could strengthen rail links between ports and inland markets. Better freight corridors and intermodal terminals could move containers more efficiently. They could also reduce pressure on long-distance road transport.
Container ports could benefit from stronger hinterland connections. Better rail infrastructure may improve cargo distribution, support intermodal operations and strengthen multimodal supply chains across Europe.
Whether the European Commission adopts these recommendations remains uncertain. However, ports, logistics providers, rail freight operators and intermodal companies will closely watch the outcome. Future decisions on EU ETS revenues could influence investment priorities and shape Europe’s freight transport network in the years ahead.
