The Railway Sector Attends a ‘Coaching Session’ to Become the Best Version of Itself
This is the second episode of the short series: Transport as a Catalyst for the EU Single Market
Born on 1 January 1993, the European Union single market turned 30 years old in 2023.
Looking back briefly at its life so far, it is worth recalling that it was conceived by the European fathers with a desire to guarantee the four freedoms, the free movement of goods, services, people and capital within the European Union.
In its childhood and adolescence there have been many attempts to achieve this. Focusing exclusively on the rail sector, from 2001, when the First Railway Package was adopted, until 2016, when the Fourth Railway Package was adopted, legislation was generally oriented towards gradually opening the rail freight and passenger service markets to competition, making national rail systems interoperable and defining a set of homogeneous conditions for the proper development of a single railway area. This was done by adopting common rules on capacity allocation, railway undertaking licenses, train driver certification, safety, charging and rail passenger rights, among other things. All this, was accompanied by the creation of the European Railway Agency in 2004 and rail regulatory bodies in each member state of the European Union.
It is now, when the 30-year-old single market is in its adulthood, a phase in which it could be considered to have completed its process of personal growth, that it may be considered to have reached its full potential. However, a series of circumstances have arisen in the last few years (the Covid-19 pandemic, geopolitical events such as the war in Ukraine, the energy crisis and the more pressing consequences of climate change…) that under the pressure of being considered one of the cornerstones of European integration have made it rethink, like any other ‘thirtysomething,’ where it is heading and where it should concentrate its efforts to survive in the changing scenario.
In order to help it remove remaining obstacles to free movement and supply it with tools for it to adapt to new developments, such as the digital transformation and the transition to a less carbon-intensive and more sustainable economy, there is nothing better than a coaching session, which is what this article provides.
So, we welcome on our couch the single European market in its characterisation as a single European railway area.
We will analyse its (i) interoperability, (ii) digitisation, (iii) sustainability and (iv) financing. All of this with the aim of helping it achieve its objectives, overcome its limitations, enhance its strengths and ultimately reinforce its self-esteem, because yes – spoiler alert – transport, and in this specific case rail transport, is undoubtedly a catalyst for the EU single market.
I. Interoperability
Interoperability, mainly in terms of ensuring that rolling stock can circulate across national borders and standardisation of systems, equipment and infrastructure, has been identified as one of the main obstacles to free movement, and therefore to successful achievement of a single European railway area, because it is insufficient. This is mainly due to what could be considered a ‘limiting belief,’ a sector with origins as a natural monopoly historically developed to meet national needs in which a wide diversity of different technical standards and regulatory approaches converged. A very graphic example in this respect is that pointed out by the European Court of Auditors in 2018 when it drew attention to the fact that up to 11,000 different rules were being applied by the railways in the EU member states, which the European Railway Agency committed to “clean up.”[1]
Among the most recent initiatives deployed by the European Union with the aim of tackling this persistent challenge, and given that the implementation of the Fourth Railway Package did not remove all the obstacles to interoperability, revision of the guidelines of the Trans-European Transport Network (TEN-T), which had previously been revised in 2004 and 2013, stands out. This revision, which was proposed in 2021 but was not approved until June 2024,[2] addresses issues such as track gauge, because a track gauge different to the European standard nominal track gauge of 1,435 mm seriously hinders the interoperability of rail networks in the European Union. Therefore, new railway lines in the core network and the extended core network should be built with the European standard nominal track gauge of 1,435 mm. In addition, member states which have a network with a different track gauge should assess the possibility of converting existing lines in the European transport corridors to the European standard nominal track gauge of 1,435 mm.
Other points addressed in the TEN-T Regulation to ensure connectivity and interoperability are a need to cooperate with third countries, in particular neighbouring countries, and the interconnection of transport modes in terminals and urban nodes, with a clear recommendation in this respect that airports with high traffic volume in the European Union should have high-speed rail access in the medium term.
II. Digitisation
Interoperability can be understood in terms of digitisation. In this respect, the European Union is fully aware that achieving a single European railway area must necessarily go hand in hand with an intelligent transport management system. Given the lack of interoperability and harmonisation of digital tools, and the failure of sectoral and national proposals to remedy this, the European Union has taken action with several initiatives, the best known being the European rail traffic management system (ERTMS), which aims to replace the different national railway communication and control systems with a single configuration at the European level. However, and in the light of the latest data,[3] it has suffered delays and its implementation has been very slow. Therefore, although since 2018 the length of ERTMS/ETCS-enabled routes has increased by 7% per year on average, the total length of routes equipped with this system in 2022 was 15,714 km, which is only 8% of the total route length. In terms of countries, Luxembourg has the highest percentage of ERTMS/ETCS routes in 2022 (97%), followed by Belgium (93%) and Switzerland (74%). In contrast, 15 countries have 5% or less.
Similarly, digitisation of processes related to rail infrastructure capacity has become essential to increase the available capacity in the medium and long term, and thus avoid increasingly frequent congestion problems. The new proposal for a regulation on the use of railway infrastructure capacity in the single European railway area[4] addresses, among other things, this need by involving all actors in the sector in exchanging information through digital tools and services based on a harmonised architecture with standardised interfaces or common systems in accordance with the Directive on the interoperability of the rail system within the EU.[5] However, the deadline for entry into force indicated in the proposal – 13 December 2026 – is considered very ambitious.[6]
Another issue to consider that could also be an obstacle to the full digitisation of the railway sector is the large amount of data stored in individual systems, although artificial intelligence could be an ally to connect these data and analyse them to achieve more efficient railway operations. This technological evolution also poses new challenges in terms of cybersecurity, especially in an environment where attacks on railway control systems are frequent and increasingly sophisticated. This is a very serious issue as the railway network is strategic for countries.
III. Sustainability
The completion and proper functioning of the European single market requires sustainability to be present in each of its actions. In this context, the objective of reducing emissions requires, among other things, a more efficient use of transport infrastructure, which requires not only a significant change in transport volumes, but also a greater use of intermodal transport.
To its credit, and in contrast to other modes of transport, the rail sector is the only one that has consistently reduced greenhouse gas emissions since 1990, thanks to electrification. Moreover, with almost 900 billion euros a year in external transport costs, rail has the lowest negative externalities on the environment and society (less than 20 billion euros per year), the largest of these costs being noise, which affects a staggering 15 million people.[7]
However, despite being the most favourable sector for the green transformation, the European Union has set several milestones in its transport system for rail transport so that it can also contribute to achieving climate neutrality.[8] These include increasing the market share of rail freight traffic by 50% by 2030 and doubling it by 2050 and doubling high-speed rail traffic by 2030 and tripling it by 2050. These targets, however, are certainly over-optimistic given that, for example, rail freight traffic barely grew by 8% in the period from 2010 to 2019.
IV. Funding
Inevitably, and if reliability is not to be compromised, proposals such as those on interoperability and digitisation, which are also sustainable, must be accompanied by substantial funding.
While transport, and in particular rail transport, has benefited over the years from the budgetary allocations of several EU funding instruments (Cohesion Fund, European Structural and Investment Funds, Connecting Europe Transport Facility, Recovery and Resilience Mechanism…), the reality is that it is not proving to be as effective as it should be.
On the one hand, this funding should be increased as it is insufficient to implement all the European rail policies and to meet the growing demand with sufficient capacity and quality, and the sector, in particular small rail operators, faces economic obstacles such as costs associated with compliance with different technical standards, charges and lengthy tendering processes.
On the other hand, a more coherent strategic approach should be taken to the priorities and projects with the highest European added value. Otherwise, the trend will continue to be towards a heterogeneous group of networks (a better national railway area), rather than an integrated system that best meets the needs of the EU as a whole (a better single railway area).
In conclusion, it is undeniable that rail transport is a real catalyst in stimulating the development of the single European market, as circumstances such as those mentioned at the beginning (the pandemic, geopolitical events, the energy crisis, climate change, etc.) have highlighted the importance and vulnerability the single European market faces when transport is unable to operate due to restrictions on free movement, particularly of people and goods.
While in this concise coaching session we have focused on interoperability, digitisation, sustainability and financing of rail transport as the main elements contributing to the single European railway area, there are other issues that also pose challenges for the sector such as the existence of still limited competition, especially in passenger rail transport, the scarcity of capacity and regulating it, in different layers ranging from the European to the national levels, with varied interpretations and multiple regulatory bodies,[9] which require a more in-depth coaching process.
With this identification of its strengths and weaknesses, our coachee – the EU single market as a whole, with special responsibility for each of its member states – has much room for action and improvement in this regard. But what is also clear is that it is not losing focus, and with its high value of commitment it is not stopping work on multiple proposals as it is never too late to become and update the best version of itself for the benefit of all citizens.
[1] ‘A European high-speed rail network: not a reality but an ineffective patchwork’ – Special Report nº 19/2018, European Court of Auditors, 2018.
[2] Regulation (EU) 2024/1679 of the European Parliament and of the Council of 13 June 2024 on Union guidelines for the development of the trans-European transport network, amending Regulations (EU) 2021/1153 and (EU) No. 913/2010 and repealing Regulation (EU) No. 1315/2013 (Regulation RTE-T).
[3] ‘12th Annual Market Monitoring Report’ – IRG-Rail, March 2024.
[4] Proposal for a Regulation of the European Parliament and of the Council on the use of railway infrastructure capacity in the single European railway area, amending Directive 2012/34/EU and repealing Regulation – COM (2023) 443 final.
[5] Directive (EU) 2016/797 of the European Parliament and of the Council of 11 May 2016 on the interoperability of the rail system within the European Union (recast).
[6] In its amendments to the proposal, the Council stated that this date of entry into force should be postponed to 13 December 2027.
[7] ‘Transport in the European Union. Current Trends and Issues’ – Mobility and Transport – European Commission, June 2024.
[8] ‘Sustainable and Smart Mobility Strategy – putting European transport on track for the future’ – Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions COM (2020) 789 final.
[9] ‘25th Florence Rail Forum: Evaluating the Recast Directive’ Policy Brief – European Transport Regulation Observer – EUI Florence School Regulation, September 2024.
