EU Commission Proposes EUR 51.5B Rail Budget for 2028-34

European rail industry stakeholders are advocating for a ‘rail first approach’ as negotiations proceed for the next Multiannual Financial Framework (2028–2034). The European Commission’s proposal for the Connecting Europe Facility (CEF) III includes a transport budget of EUR 51.5 billion, with a significant EUR 17.5 billion earmarked for military mobility. Enno Wiebe, Director General of the European Rail Supply Industry Association (UNIFE), states that securing this funding is essential for meeting climate, transport, and security objectives across the continent.

The proposed funding level is not guaranteed. Wiebe notes that negotiations within the EU Council are ongoing and the final budget size is contingent on agreements regarding the EU’s own resources. UNIFE is actively working to ensure the proposed allocation is confirmed and potentially increased. The argument presented to policymakers is that prioritizing rail investment provides a direct path to achieving TEN-T network completion, accelerating the ERTMS rollout, and enhancing military logistics capabilities. Predictable long-term financing is presented as a prerequisite for the supply industry to deliver on these goals.

Military mobility requirements are a significant driver for network upgrades. The allocated funding is intended to remove bottlenecks and harmonize the network to meet the 2030 TEN-T deadlines. Wiebe identifies this as an opportunity for EU-level harmonization, streamlining vehicle authorization and operational rules to permit seamless defense personnel movement. Collaboration with the European Union Agency for Railways (ERA) is underway to address existing network fragmentation and signaling investment needs.

Digitalization is identified as the core enabler for increased capacity and performance, yet its implementation presents the sector’s primary challenge. According to Wiebe, the main obstacle is not the technology itself but the migration from legacy systems while maintaining daily operations. The transition requires a staged roadmap, combining incremental improvements with large-scale programs. Near-term returns are being realized through pragmatic solutions like predictive maintenance, condition monitoring, and data-driven asset management, which improve reliability and prepare infrastructure for systemic changes.

Future network operations depend on the successful deployment of next-generation technologies developed under Europe’s Rail Joint Undertaking. The Future Railway Mobile Communication System (FRMCS) is a critical component, with its rapid implementation considered essential as the current GSM-R system nears its operational end-of-life. Other key technologies include Digital Automatic Coupling (DAC). Wiebe stresses the need for pre-deployment funding to ensure these systems are implemented effectively. He also cautions against transversal digital regulations like the Cyber Resilience Act and Data Act, arguing they do not fit the business-to-business model and long life-cycles specific to the rail sector.

A successor to Europe’s Rail Joint Undertaking is deemed critical for maintaining Europe’s global leadership in rail innovation. Without a continued joint EU-level program, the sector risks losing its technological advantage to global competitors who are prioritizing innovation. Wiebe draws a parallel to the silicon chip industry, where a perceived long-term advantage was eroded rapidly. Continued investment in a centralized R&D framework is positioned as necessary to deliver harmonized, interoperable technologies and prevent a return to fragmented national programs.

The European rail supply market faces what UNIFE describes as unfair competition from third-country companies. Wiebe asserts that European suppliers operate under strict labor and environmental laws and cannot access certain foreign markets, while state-supported foreign entities have open access to European tenders. This has prompted calls for changes to EU Public Procurement Directives. A further argument is made to ban high-risk foreign suppliers from critical infrastructure, particularly networks designated for military transport, citing national security concerns.

While high-level policy discussions focus on funding and regulation, ground-level projects across Europe reflect the ‘rail first’ ambition. Verification data points to a proposed high-speed rail loop to connect nine cities across the UK, Ireland, and Scotland, and the ongoing Northern Powerhouse Rail program to upgrade links between northern English cities. In a related corporate development, Italy’s state-owned Ferrovie dello Stato Italiane selected London for its new global consultancy, FS Advisory. These initiatives stand in contrast to the challenges faced by projects like California’s high-speed rail, which is experiencing significant delays and cost overruns reported at $215 million per mile, highlighting the execution risks inherent in large-scale infrastructure.

The ultimate challenge for the sector is coordinating stakeholders to manage a seamless technological migration. Wiebe concludes that issues in freight and passenger rail, such as slow technology adoption and inconsistent rules, are interlinked. Unifying the sector to address these shared challenges, from ERTMS deployment to securing stable financing, is the primary objective for UNIFE.