The Shift2Rail Joint Undertaking – Frequently Asked Questions
European Commission - MEMO/13/1143 16/12/2013
Brussels, 16 December 2013
The Shift2Rail Joint Undertaking – Frequently Asked Questions
What is the challenge?
Ambitious EU goals relating to climate change, energy supply and the environment mean that the railway sector will have to take on a larger share of transport demand in the next decades. In its 2011 White Paper on a Roadmap to a Single European Transport Area, the Commission underlined the importance of creating a Single European Railway Area in order to achieve a more competitive and resource-efficient European transport system. The White Paper aims for 30% of road freight over 300 km to shift to other modes such as rail or waterborne transport by 2030, and more than 50% by 2050. It also aims for a majority of medium-distance passenger transport to go by rail by 2050.
However, rail is finding it difficult to challenge the dominance of road transport, despite positive developments in some markets. Overall, rail's share of intra-EU passenger transport has remained stable at just 6.3% since 2000. Rail freight has only grown by 8.8% since 1995, while the overall growth of other modes has been 25%. Furthermore, rail transport continues to rely to a large extent on public subsidies (some EUR 46 billion annually)1, while passenger satisfaction lags behind many other sectors, according to recent Eurobarometer surveys.
Faced with these challenges, the Commission has adopted proposals for a 4th Railway Package (IP/13/65) which aim to remove remaining administrative, technical and regulatory obstacles holding back the rail sector both in terms of market opening and in terms of interoperability. But these measures will have to be accompanied by research and innovation efforts to produce new technologies capable of reducing operational and infrastructure costs, enhancing safety and creating new business opportunities for the European rail supply industry, both in Europe and beyond.
In past decades, significant investments in EU rail research and innovation have helped the European rail supply industry to retain a leading position at global level, namely with the development of high-speed trains, ERTMS (European Rail Traffic Management Systems), automated metro systems, etc. However, a recent Commission study on the competitiveness of the railway supply industry shows that Asia is steadily overtaking Europe as the largest rail supply market, namely thanks to a surge in research and innovation investments in countries like China and Korea.
Why is public intervention needed?
Rail research and innovation suffers from the following important market and systemic failures that justify public intervention:
Set against these challenges, a coordinated EU approach to research and innovation in the rail sector via the establishment of a joint undertaking is proposed to support the completion of the Single European Railway Area and to increase the competitiveness of the EU rail sector as a whole.
What is the Shift2Rail Joint Undertaking?
The Shift2Rail Joint Undertaking (the S2R JU) will be a public-private partnership in the rail sector, providing a platform for the rail sector to work together with a view to driving innovation in the years to come.
The main bodies of the S2R JU will be the Governing Board, in charge of strategic decision-making, and the Executive Director, responsible for day-to-day management of the S2R JU. There will also be two advisory bodies: a Scientific Committee and a States' Representatives Group.
Similarly to the Joint Technology Initiatives2 set up under the Horizon 2020 Framework Programme the S2R JU will seek to pursue research and innovation activities in support of European competitiveness. However, an essential role of the S2R JU will also be to act as the technological arm of the Single European Railway Area (SERA).
The S2R JU will be charged with developing a European Strategic Master Plan defining the priority research and innovation activities, including large-scale demonstration activities, required to accelerate the penetration of integrated and interoperable technological innovations necessary to support the Single European Railway Area and to achieve operational excellence of the railway system, while increasing capacity and reliability and driving down costs of railway transport.
Activities will focus around five key areas, corresponding to the five "Innovation Programmes" defined in the Regulation:
What are the objectives and targets of the Shift2Rail Joint Undertaking?
The S2R Joint Undertaking shall seek to develop, integrate, demonstrate and validate innovative technologies and solutions that uphold the strictest safety standards and can be measured against the following key performance indicators:
Who will be part of the Shift2Rail Joint Undertaking?
The Founding Members of the S2R JU will be the Union and 8 rail industry partners, including rail equipment manufacturers Alstom, Ansaldo STS, Bombardier, Siemens, Thales and CAF, as well as infrastructure managers Trafikverket and Network Rail.
Founding Members other than the Union consist of single legal entities, having their headquarter (or the headquarter of the division related to the rail sector) in a member state of the EU, that have expressed, in writing, following intensive stakeholder consultations, their agreement to an individual own contribution of at least EUR 30 million to pursue research activities in the area of the Shift2Rail Joint Undertaking.
Next to these Founding Members, additional members of the Joint Undertaking (Associated Members) will be selected through an open call for membership. Associated Members may consist of groupings or consortia of legal entities, established in a Member State or in a country associated to the Horizon 2020 Framework Programme. The S2R Joint Undertaking shall encourage the participation of SMEs, and of actors from the entire rail value chain, as well as from outside the traditional rail sector.
Further to these members, the European Railway Agency (ERA) will have a role of advisor to the Joint Undertaking to ensure that the research and innovation activities undertaken by the JU will have a strong link with the goal of achieving a Single European Railway Area and to provide its expertise on issues relating to interoperability and safety in particular.
What will the total budget be?
The EU's share of the funding, amounting to a maximum of 450 million Euros over the period 2014 to 2020, will come from the Horizon 2020 programme, as part of the EU's new Multi-Annual Financial Framework.
To access this funding, the rail industry will have to commit to a contribution of at least EUR 470 million, bringing the total S2R JU budget up to at least EUR 920 million.
This will ensure a significant leverage effect of the EU contribution in boosting competitiveness, growth and jobs in Europe.
Additional funds complementing the Horizon 2020 funds may be allocated from other Union instruments, such as the Connecting Europe Facility, to support actions for the deployment of mature outcomes of the S2R Joint Undertaking.
At least 30% of the Union contribution will be reserved for fully open calls, while up to 40% will be allocated to Founding Members other than the Union and up to 30% to Associated Members.
Who will benefit from the initiative?
The proposed initiative will affect all actors in the rail sector, by proposing a range of novel business, operational and service solutions that support the search for a "best-in-class" profile for rail. In particular, the following actors will be affected:
Other industrial sectors, including tiered suppliers and actors in economic subsectors that make use of the goods and services provided by the rail sector, may also be affected.
By contributing to reducing infrastructure and operating costs, the initiative will help to reduce the scale of subsidies paid out by national governments. By retaining European leadership in the rail sector, this will also help to create new high quality European jobs.
Passengers and freight service users will be indirectly affected as reliability and quality of services are enhanced. Improved competitiveness of the rail sector, combined with increased capacity, will help it to take on an increased share of transport demand, thereby contributing to reducing traffic congestion and CO2 emissions. Citizens' health and wellbeing will also be positively affected thanks to reduced noise pollution from rail.
What are the benefits of the way the S2R JU works?
Key facts and figures
Such as the Clean Sky, Innovative Medicines (IMI), Fuel Cells and Hydrogen (FCH), Bio-based Industries (BBI) and Electronic Components and Systems (ECSEL) Joint Technology Initiatives to be established under the Horizon 2020 programme, following the Commission's Communication of 10 July 2013 on "Public-private partnerships in Horizon 2020: a powerful tool to deliver on innovation and growth in Europe"