EU Rail Industry Eyes €18B Investment to Beat Global Rivals

European rail industry seeks €18B for a ‘Europe’s Rail’ successor. This investment aims to boost tech leadership, counter rivals, and advance strategic autonomy.

January 27, 2026 3:39 pm

🛑 Key Takeaways:

Europe’s rail supply industry is advocating for a successor to the ‘Europe’s Rail’ public-private research program to maintain its global market position.
The proposal calls for a combined €18 billion: €3B from Horizon Europe for R&D (2028-2034) and €15B from the European Competitiveness Fund for technology deployment.
This investment aligns with broader EU policy on strategic autonomy, aiming to develop domestic technologies like FRMCS and DAC to counter non-EU rivals and reduce reliance on foreign suppliers.

BRUSSELS – The European rail supply industry has outlined an €18 billion funding proposal for a new public-private research initiative intended to succeed the current ‘Europe’s Rail’ program. The plan aims to secure the continent’s technological lead against global competitors by developing and deploying key systems, a move that supports the European Commission’s wider push for economic sovereignty and strategic autonomy.

Category	Specification / Detail
Program Name	‘Europe’s Rail’ Successor Program (Proposed)
Proposed R&D Budget	€3 billion from Horizon Europe / FP10
Proposed Deployment Budget	€15 billion from European Competitiveness Fund (ECF)
Funding Period	2028-2034 (for Horizon Europe component)
Key Technologies	Future Railway Mobile Communication System (FRMCS), Digital Automatic Coupling (DAC)
Strategic Goals	Competitiveness, decarbonisation, strategic autonomy

Operational & Technical Details

The proposed funding focuses on deploying technologies developed under previous research programs. The Future Railway Mobile Communication System (FRMCS) is a critical component. It is designed to replace the legacy 2G-based GSM-R network for rail signalling across Europe. This shift to a modern, radio-based system is essential for increasing network capacity and safety.

For the freight sector, Digital Automatic Coupling (DAC) is a primary focus. DAC automates the physical linking of rail freight wagons, a process still largely done manually. Widespread deployment would increase operational efficiency and help rail freight compete more effectively against road and air transport, contributing to the EU’s decarbonisation targets.

Market Impact Analysis

Failure to fund a successor program could cede a competitive advantage to non-EU suppliers, who are also investing heavily in rail technology. The proposal’s emphasis on homegrown tech directly supports the EU’s policy of strategic autonomy, underscored by recent revisions to the EU Cybersecurity Act which seek to limit reliance on high-risk, non-EU technology suppliers in critical sectors.

However, the proposed funding structure faces potential political hurdles. MEP Eszter Lakos has publicly warned against the new European Competitiveness Fund “cannibalising” the Horizon Europe research budget. This highlights a potential conflict over whether research funding will be driven by independent scientific priorities or by the ECF’s industrial competitiveness mandate, creating uncertainty for the program’s final structure and approval.

FAQ: Quick Facts

What is the total proposed value of the program?

The proposal calls for a combined €18 billion: €3 billion for research and development from Horizon Europe, and €15 billion for pre-deployment of technologies from the European Competitiveness Fund.

What key technologies will this funding support?

The investment would primarily support the deployment of the Future Railway Mobile Communication System (FRMCS) for signalling and Digital Automatic Coupling (DAC) for the freight sector.