EU Rail Industry Seeks €18B Funding to Counter China’s Rail

EU rail suppliers seek €18 billion in funding to maintain global leadership, crucial for deploying FRMCS and DAC, ensuring network upgrades and job security.

January 27, 2026 6:38 pm

🛑 Key Takeaways:

European rail suppliers are requesting €18 billion in EU funding from 2028-2034 to maintain their global lead against state-supported rivals, particularly from China.
The proposal allocates €3bn for core research via Horizon Europe and €15bn for technology deployment from the European Competitiveness Fund.
Without sustained investment, the rollout of critical technologies like Digital Automatic Coupling (DAC) and the FRMCS communication system is at risk, jeopardizing network upgrades and market share.

BRUSSELS – The European Rail Supply Industry has warned that its global leadership is at risk without a commitment of €18 billion in EU research and deployment funding for the 2028-2034 period. The call for a successor to the Europe’s Rail Joint Undertaking comes amid internal EU debate, with legislators like MEP Eszter Lakos cautioning that deployment-focused funds must not cannibalise core research budgets.

Category	Specification / Detail
Proposed Programme	Successor to Europe’s Rail Joint Undertaking
Total Requested Funding	€18 Billion
Funding Breakdown	€3bn (Horizon Europe/FP10) for R&D; €15bn (European Competitiveness Fund) for pre-deployment
Timeframe	2028 – 2034
Key Technologies	Future Railway Mobile Communication System (FRMCS), Digital Automatic Coupling (DAC)
Key Stakeholders	European Rail Supply Industry, European Commission, MEP Andreas Schieder
Industry Employment	~650,000 jobs across Europe

Operational & Technical Details

The proposed funding is intended to accelerate the transition of research into operational technology. Two primary systems are targeted. The Future Railway Mobile Communication System (FRMCS) is designed to replace the continent’s aging 2G-based GSM-R signalling network. This transition to a next-generation radio system is essential for increasing network capacity and improving service quality. For freight, Digital Automatic Coupling (DAC) is a priority. DAC automates the physical linking of wagons, a process that is currently manual, slow, and hazardous. Its implementation is expected to significantly improve the efficiency and safety of rail freight, strengthening its competitive position against road transport.

Market Impact Analysis

Industry leaders argue that failure to commit to this funding level would hand a strategic advantage to non-EU competitors. China’s state-backed rail industry continues to receive heavy support, enabling it to compete aggressively on a global scale. The investment is framed as essential for Europe’s strategic autonomy, industrial resilience, and decarbonisation goals. However, the proposal faces political complexities within the EU. Concerns that the large €15bn deployment fund could divert resources from the €3bn core research budget of Horizon Europe highlight the challenge of balancing long-term innovation with near-term industrial application. This internal debate could delay or alter the final funding package, creating uncertainty for the supply chain which supports approximately 650,000 jobs.

FAQ: Quick Facts

What is the total funding requested by the rail industry?

A total of €18 billion is requested for the 2028-2034 period. This is proposed as €3 billion from Horizon Europe for research and €15 billion from the European Competitiveness Fund for deployment.

What are the key technologies this funding would support?

The funding prioritises the Future Railway Mobile Communication System (FRMCS) to upgrade rail signalling and Digital Automatic Coupling (DAC) to modernise rail freight operations.