The European Commission on Friday approved Germany’s program to help its freight railroads reduce their carbon emissions.
The commission must sign off on European Union-member programs offering industries state aid.
In January, Germany notified the commission of its proposed freight rail emissions reduction program, which includes an aid package estimated to cost 500 million euros (about $582 million) from 2018 to 2022.
Under the program, railroads providing electric-powered rail transport services may be compensated for up to 50 percent of expenses incurred by acquiring the necessary equipment and systems.
The participating railroads also must demonstrate a year-over-year improvement in energy efficiency of 1.75 percent, which will be raised to 2 percent starting in 2020, to receive aid.
In addition to the CO2 emission reductions, the German government said the program will promote the shift of freight traffic from road to rail.
“By promoting a shift from road to rail, the German scheme will contribute to meeting the EU’s environmental and transport objectives, without distorting competition,” said EU Commissioner Margrethe Vestager in charge of competition policy in a statement.