Commission Decision (EU) 2025/1167 of 29 November 2024 on State aid SA.50952 (202... (32025D1167)
Commission Decision (EU) 2025/1167 of 29 November 2024 on State aid SA.50952 (2022/C) (ex 2018/FC) implemented by Germany for DB Cargo (notified under document C(2024) 8610)
- COMMISSION DECISION (EU) 2025/1167
- of 29 November 2024
- on State aid SA.50952 (2022/C) (ex 2018/FC) implemented by Germany for DB Cargo
- (notified under document C(2024) 8610)
- (Only the English text is authentic)
- (Text with EEA relevance)
- 1.
- PROCEDURE
- 2.
- DETAILED DESCRIPTION OF THE MEASURES
- 2.1.
- DB Cargo: corporate history, structure and corporate rules
- Figure 1
- DB group business organisation
- 2.2.
- Activities of DB Cargo and position on various service markets
- Figure 2
- DB Cargo market share in total in Member States with DB Cargo activity
- Table 2
- Position of DB Cargo on rail freight markets in various Member States
- Table 3
- Position DB Cargo per activity in various Member States
- 2.3.
- The measures subject to the investigation
- 2.3.1.
- Compensation of annual losses of DB Cargo under the profit and loss transfer agreement (‘Measure 1’)
- Figure 3
- Risks and opportunities mid-term plan for 2021-2025
- Figure 4
- Concluding assessment of SWL scenarios
- Figure 5
- DB Cargo indicators mid-term plan 2020 by business segment
- Figure 6
- Mid-term plan 2020 SWL State support
- Figure 7
- Mid-term plan 2021 SWL State support
- Figure 8
- Mid-term plan 2022 SWL State support
- 2.3.2.
- Pricing of intra-group services (‘Measure 2’)
- 2.3.3.
- Advantageous financing conditions of loans by DB Treasury (‘Measure 3’)
- 2.3.4.
- Partial coverage by BEV of the remuneration of civil servants employed by DB Cargo (‘Measure 4’)
- 2.4.
- Grounds for initiating the procedure
- 3.
- COMMENTS FROM INTERESTED PARTIES
- 3.1.
- ERFA
- 3.2.
- The complainant
- 4.
- COMMENTS FROM GERMANY
- 4.1.
- General preliminary observations
- 4.1.1.
- Observations on the measures concerned
- 4.1.1.1. Compensation of annual losses of DB Cargo under the profit and loss transfer agreement (Measure 1)
- 4.1.1.2. Pricing of intra-group services (‘Measure 2’)
- 4.1.1.3. Advantageous financing conditions of loans by DB Treasury (‘Measure 3’)
- 4.1.1.4. Partial coverage by BEV of the remuneration of civil servants employed by DB Cargo (‘Measure 4’)
- 4.1.1.5. Measures concerned as
- existing aid
- 4.1.2.
- Observations on the comments from interested parties
- 4.1.2.1. Germany’s observations on ERFA’s comments
- 4.1.2.2. Germany’s observation on the complainant’s comments
- 4.1.3.
- Compatibility with the internal market
- 4.1.4.
- The restructuring plan of DB Cargo
- 4.1.4.1. Description of the restructuring plan and supporting restructuring aid
- 4.1.4.1.1. DB Cargo’s Restructuring Plan
- 4.1.4.1.1.1. Overview of DB Cargo’s Transformation Plan
- 4.1.4.1.1.2. DB Cargo’s Restructuring Plan measures
- 4.1.4.1.1.3. Restructuring Plan measures in the single wagon segment
- 4.1.4.1.1.3.1. Restructuring Plan measure 1: Single Wagon segment network optimisation through design review
- 4.1.4.1.1.3.2. Restructuring Plan measure 2: Single Wagon segment overall production optimisation measures
- 4.1.4.1.1.3.3. Restructuring Plan measure 3: Single Wagon segment quality improvement and base price adjustment measures
- 4.1.4.1.1.3.4. Effects of the Single Wagon segment measures of the Restructuring Plan on DB Cargo’s EBIT projections
- 4.1.4.1.1.4. Restructuring Plan measures in the Block Train segment
- 4.1.4.1.1.4.1. Restructuring Plan measure 4: Block Train segment logistics solutions and portfolio optimisation
- 4.1.4.1.1.4.2. Restructuring Plan measure 5: Block Train segment production robustness increase
- 4.1.4.1.1.4.3. Restructuring Plan measure 6: Block Train segment quality improvements and related base price adjustments
- 4.1.4.1.1.4.4. Effects of Block Train segment measures of the Restructuring Plan on DB Cargo’s EBIT projections
- 4.1.4.1.1.5. Restructuring Plan measures in the Combined Transport segment
- 4.1.4.1.1.5.1. Restructuring Plan measure 7: Maritime Combined Transport sub-segment change of production
- 4.1.4.1.1.5.2. Restructuring Plan measure 8: Maritime Combined Transport sub-segment network redesign
- 4.1.4.1.1.5.3. Restructuring Plan measure 9: Maritime Combined Transport sub-segment terminals integration
- 4.1.4.1.1.5.4. Restructuring Plan measure 10: Maritime Combined Transport sub-segment portfolio optimisation
- 4.1.4.1.1.5.5. Restructuring Plan measure 11: Maritime Combined Transport sub-segment partnership options evaluation
- 4.1.4.1.1.5.6. Restructuring Plan measure 12: Continental Combined Transport sub-segment re-dimensioning of Kombiverkehr
- 4.1.4.1.1.5.7. Restructuring Plan measure 13: Continental Combined Transport sub-segment production change
- 4.1.4.1.1.5.8. Restructuring Plan measure 14: Carrier Sales sub-segment portfolio optimisation
- 4.1.4.1.1.5.9. Effects of Combined Transport segment measures of the Restructuring Plan on DB Cargo’s EBIT projections
- 4.1.4.1.1.6. Restructuring Plan measures in DB Cargo’s European Subsidiaries
- 4.1.4.1.1.6.1. Restructuring Plan measure 15: European Subsidiaries portfolio optimisation
- 4.1.4.1.1.6.2. Restructuring Plan measure 16: European Subsidiaries cost reductions
- 4.1.4.1.1.6.3. Restructuring Plan measure 17: European Subsidiaries’ operational efficiency
- 4.1.4.1.1.6.4. Effects of DB Cargo’s European Subsidiaries measures of the Restructuring Plan on DB Cargo’s EBIT projections
- 4.1.4.1.1.7. Restructuring Plan measures in DB Cargo’s administration
- 4.1.4.1.1.7.1. Restructuring Plan measure 18: Administration’s IT standardisation
- 4.1.4.1.1.7.2. Restructuring Plan measure 19: Administration’s office space reduction
- 4.1.4.1.1.7.3. Restructuring Plan measure 20: Administration’s marketing and strategic activities with DB AG reduction
- 4.1.4.1.1.7.4. Restructuring Plan measure 21: Administration’s manual finance processes digitalisation and automation
- 4.1.4.1.1.7.5. Restructuring Plan measure 22: Administration’s offer management and service design departments rightsizing
- 4.1.4.1.1.7.6. Restructuring Plan measure 23: Administration’s structure and domestic sales subsidiaries’ harmonisation
- 4.1.4.1.1.7.7. Restructuring Plan measure 24: Administration’s management structure rightsizing
- 4.1.4.1.1.7.8. Restructuring Plan measure 25: Administration’s other costs reduction
- 4.1.4.1.1.7.9. Effects of DB Cargo’s Administration measures of the Restructuring Plan on DB Cargo’s EBIT projections
- 4.1.4.1.1.8. Restructuring Plan measures in DB Cargo’s production-related and Control Tower overhead
- 4.1.4.1.1.8.1. Restructuring Plan measure 26: Production-related and Control Tower’s integration of asset steering and personnel scheduling
- 4.1.4.1.1.8.2. Restructuring Plan measure 27: Production-related and Control Tower’s detailed planning reduction
- 4.1.4.1.1.8.3. Restructuring Plan measure 28: Production-related and Control Tower’s crew dispatching functions consolidation
- 4.1.4.1.1.8.4. Restructuring Plan measure 29: Production-related and Control Tower’s long-distance shift planning process optimisation
- 4.1.4.1.1.8.5. Restructuring Plan measure 30: Production-related and Control Tower’s maintenance digitisation
- 4.1.4.1.1.8.6. Restructuring Plan measure 31: Production-related and Control Tower’s efficiency improvement
- 4.1.4.1.1.9. Restructuring Plan measures in response to additional materialised risks
- 4.1.4.1.1.9.1. Restructuring Plan measure 32: Substantial headcount reduction in response to negative volume trends
- 4.1.4.1.1.9.2. Restructuring Plan measure 33: Factor cost reduction in response to negative volume trends
- 4.1.4.1.1.9.3. Restructuring Plan measure 34: One-off effects on net income in 2024 in response to negative volume trends
- 4.1.4.1.1.9.4. Restructuring Plan measure 35: DB Cargo maintenance productive increase
- 4.1.4.1.1.9.5. Restructuring Plan measure 36: DB Group internal services and traction energy costs reduction
- 4.1.4.1.1.9.6. Restructuring Plan measure 37: Depreciation and investment reduction
- 4.1.4.1.1.9.7. Restructuring Plan measure 38: Sale and lease back of locomotives
- 4.1.4.1.1.9.8. Restructuring Plan measure 39: Locomotives purchase-to-lease conversion
- 4.1.4.1.1.9.9. Restructuring Plan measure 40: Improvements in working capital
- 4.1.4.1.1.9.10. Restructuring Plan measure 41: Single wagon segment price increases
- 4.1.4.1.1.10. Overall effect of the Restructuring Plan measures on DB Cargo’s EBIT projections
- 4.1.4.2. Financing of the restructuring plan
- 4.1.4.2.1. Restructuring costs
- 4.1.4.2.2. Sources of financing of the restructuring measures
- 4.1.4.2.2.1. Restructuring aid
- 4.1.4.2.2.2. Own contribution from the beneficiary
- 4.1.4.2.3. Financial projections in baseline and pessimistic scenario
- 4.1.4.2.3.1. Baseline scenario financials
- 4.1.4.2.3.2. Pessimistic scenario financials
- 4.1.5.
- Measures limiting distortions of competition and trade
- 4.1.5.1. General commitments on commercial policy
- 4.1.5.1.1. Prohibition of acquisition
- 4.1.5.1.2. Sale of shares
- 4.1.5.2. Measures to strengthen competition (services purchase)
- 4.1.5.3. Output volume cap
- 4.1.5.4. Sale of locomotives
- 4.1.5.5. General and final provisions applicable to the commitments
- 4.1.5.6. State of advancement concerning the sale of shares and locomotives
- 5.
- ASSESSMENT OF THE MEASURES
- 5.1.
- Existence of State aid
- 5.1.1.
- Engagement of the State resources
- 5.1.2.
- Imputability to the State
- 5.1.2.1. Compensation of annual losses of DB Cargo under the profit and loss transfer agreement (‘Measure 1’)
- 5.1.2.2. Pricing of intra-group services (‘Measure 2’) and advantageous financing conditions of loans by DB Treasury (‘Measure 3’)
- 5.1.2.3. Partial coverage by BEV of the remuneration of civil servants employed by DB Cargo (‘Measure 4’)
- 5.1.3.
- Selective advantage
- 5.1.3.1. Compensation of annual losses of DB Cargo under the profit and loss transfer agreement (‘Measure 1’)
- 5.1.3.1.1. Signing the PLTA in 2012
- 5.1.3.1.2. Period until end-2016
- 5.1.3.1.3. Period as from 2020
- 5.1.3.2. Partial coverage by BEV of the remuneration of civil servants employed by DB Cargo (‘Measure 4’)
- 5.1.4.
- Distortion of competition and effect on trade
- 5.1.5.
- Conclusion on the existence of aid
- 5.2.
- New aid
- 5.3.
- Lawfulness of the aid
- 5.4.
- Compatibility of the aid with the internal market
- 5.4.1.
- Eligibility
- 5.4.2.
- The aid facilitates the development of certain economic activities or certain economic areas
- 5.4.2.1. Prevention of social hardship or market failure contributing to the development of an economic activity or an economic area
- 5.4.2.2. The aid avoids the disruption of an important service
- 5.4.2.3. Restructuring plan and return to long-term viability
- 5.4.2.3.1. Assessment of the credibility of the Restructuring Plan to address the causes of DB Cargo’s financial difficulties
- 5.4.2.3.2. Assessment of the credibility of the Restructuring Plan’s assumptions
- 5.4.2.3.3. Assessment of the credibility of the beneficiary’s return to viability
- 5.4.3.
- Positive effects of the aid on the development of economic activities or of economic areas outweigh the negative effects, in terms of distortions of competition and adverse effects on trade
- 5.4.3.1. Necessity of the aid and incentive effect
- 5.4.3.2. Appropriateness
- 5.4.3.3. Proportionality of the aid and burden-sharing
- 5.4.3.3.1. Own contribution
- 5.4.3.3.1.1. Mezzanine Capital (Subordinated Convertible Loans of EUR 842 million) and Credit Lines (EUR 325 million and EUR 434 million)
- Figure 9
- Corporate bond yield curve for different maturities and ratings
- 5.4.3.3.1.2. Proceeds from asset divestments (EUR [460-560] million)
- 5.4.3.3.1.3. Factoring of receivables by HSBC (EUR [100-140] million)
- 5.4.3.3.1.4. Transfer and coverage of staff wage and severance costs (EUR [100-140] million)
- 5.4.3.3.1.5. Conclusion
- 5.4.3.3.2. Burden sharing
- 5.4.3.3.3. Conclusion
- 5.4.3.4. ‘One-time, last time’ principle and limitation of distortions of competition
- 5.4.3.4.1.1. ‘One-time, last time’ principle
- 5.4.3.4.1.2. Limitation of distortions of competition
- Figure 10
- Development of revenues on the German rail market in EUR billion (rail freight in grey/top of the columns)
- Figure 11
- Rail freight market in Germany in 2023
- 5.4.3.4.1.2.1. Structural measures
- 5.4.3.4.1.2.2. Behavioural measures
- 5.4.3.5. Aid granted to DB Cargo or its subsidiaries during the restructuring period.
- 5.4.3.6. Transparency
- 5.4.4.
- Balancing positive and negative effects
- 6.
- CONCLUSION
- Article 1
- Article 2
- Article 3
- Article 4
- Article 5
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