On 17 July 2026, the European Commission will unveil a comprehensive proposal to revise the EU Emissions Trading System (ETS), aligning the carbon market with the Union's 2040 climate target and industry competitiveness objectives. Just days before the proposal is unveiled, Europe’s rail and Combined Transport sectors collectively ask that the ETS remains true to its spirit: by earmarking its revenues to reward the sectors that have effectively decarbonised and hold accountable those that have not.
As several transport modes, including those dominantly powered by fossil fuels, come forward to claim a share of the ETS revenue, we point out that rail is already Europe’s lowest-emission mass transport system and a proven carbon avoidance engine for both freight and passengers. Over 80% of rail traffic in the EU is already electrified, and rail accounts for less than 1% of transport greenhouse gas emissions. Unlike road or aviation, rail already runs largely on decarbonised electricity, and delivers system-wide emission savings when freight shifts from road to rail and combined transport, and when passengers shift from short-haul aviation or private cars to rail. This makes it future-ready from a climate standpoint and far less dependent on offset mechanisms.
At the same time, electrified rail transport, electric transshipment and electric trucks are indirectly penalised by the ETS, given that the electricity market powering these activities has been fully covered by the ETS carbon pricing mechanism from the onset. Rail is not asking to be exempted from the ETS, but asks that some of what it pays return to support the use of its capacity. (....)