Germany trains

Germany earmarks additional 1.2 billion euros for public transport services

Germany earmarks additional 1.2 billion euros for public transport services

Improvements in the sector are part of the government’s climate plan and aim to discourage the use of private cars

Increasing the use of public transport means a decrease in the use of private cars, and hence a reduction of pollution. Driven by this simple logic, the Federal Government in Germany has announced a decision to increase its subsidies for public transport services.

The objective is to further finance the functioning and development of public buses, regional and S-bahn networks, railway system reconstruction and purchase of new trains and buses.

According to current regionalisation laws, annual funds are to be increased by 1.8 per cent every year until 2031. This means a steep increase by €150 million in 2020, by €300 million in 2021 and 2022, and by €450 million by 2023, or a whopping total of around €1.2 billion.

Lobby groups and transport operators have welcomed the announcement. The Pro-Rail Alliance Managing Director Dirk Flege, quoted by, said that “the federal government wants to double the number of passengers in local and long-distance transport by 2030 and the additional funds are a step in the right direction.”

According to the Federal Ministry of Transport and Digital Infrastructure, ticket sales alone cannot help local authorities cover their expenses in public transport maintenance. Therefore, the Federal Government is currently allocating a total of more than nine billion euros to the federal states so that they can keep providing a lucrative range of public transport services.

Funding aligned with the plan to combat climate change

The decision to up the ante in federal public transport financing is aligned with the government’s climate plan, announced on September 20 this year. It incorporates far-flung measures to combat climate change, like introducing a carbon price for companies operating in key sectors such as transport. The plan also provides for a €54bn spending package to urge companies and households to reduce their carbon footprint. Germany is Europe’s largest economy and the sixth-largest emitter of CO2 gasses in the world.

As for transport, a cut in VAT will make rail travel cheaper and airfares will rise under a new taxation policy; owners of heavily polluting cars will have to pay higher taxes, while electric vehicles will enjoy tax breaks and benefits. Among them is the plan to install at least 1 million charging points for electric vehicles, forecast to mushroom to 10 million by 2030, across Germany.




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