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European Court of Justice Case C-770/23 declaring the German track access charge cap to run contrary to European law
European Court of Justice Case C-770/23 declaring the German track access charge cap to run contrary to European law
Underlying proceedings and preliminary request to the Court of Justice of the European Union (CJEU)
The CJEU's preliminary ruling was based on a legal dispute before the Administrative Court of Cologne (case no. 18 L 678/23) between DB InfraGO AG and DB Regio Netz Infrastruktur GmbH (the applicants) and the Federal Republic of Germany, represented by the Federal Network Agency (the defendant). The case concerned the calculation of charges for the use of railway infrastructure ('Track Access Charges – TAC”).
The applicants, acting jointly as infrastructure managers, operate the majority of the rail network in Germany. They charge track access charges to railway undertakings that have access to their networks for the use of their railway infrastructure; these charges must first be approved by the Federal Network Agency.
However, the Federal Network Agency did not authorise the applicants' charges for regional and local rail passenger transport services. Instead, it decided to calculate lower charges.
For long-distance rail passenger transport services and rail freight transport, the Agency considered the applicants' (DB InfraGO AG and DB Regio Netz Infrastruktur GmbH) charges to be too low and increased them.
This corrective calculation by the Federal Network Agency was prompted by the so-called “track access charge cap” for local rail passenger transport, as provided for by the German Railway Regulation Act. This results in a cap on the fees charged for using the railway network in this sector. However, as infrastructure managers are obliged by German law to ensure that their charges cover their total costs, the Agency demanded correspondingly higher track access charges for freight and long-distance passenger trains.
In the main proceedings, the Cologne Administrative Court ruled that the obligation to cover all costs placed an excessive burden on freight and long-distance passenger services, referring the matter to the Court of Justice of the European Union to determine whether the German charging regulations undermined the independence of infrastructure managers as set out in Articles 29(1) and 4(2) of Directive 2012/34. The referring court criticised the fact that the infrastructure manager would be required to calculate the applicable charges in the regional and local rail transport sector using a mathematical formula with no discretion.
Decision of the CJEU
The CJEU answered the referred question in the affirmative. In particular, it highlighted that the charging regime introduced by Directive 2012/34 is based on the principle that it is for the Member State to establish a framework charging scheme, which covers general charging rules and that it is for the infrastructure manager to implement this framework by calculating and levying charges for the use of railway tracks and service facilities. In this context, it should be noted that the regime introduced by Directive 2012/34 is intended to ensure the independence of the infrastructure manager's management. To ensure this independence, the infrastructure manager must have some discretion when calculating charges within the charging framework defined by the Member States so that they can use this as a management tool.
Without this degree of discretion, infrastructure managers would be unable to optimise the use of their infrastructure through charging arrangements, nor would they have any incentive to invest in railway infrastructure.
Therefore, it would appear that, in the case in question, the role of the infrastructure manager had been limited to applying a mathematical formula without discretion, which contradicted Directive 2012/34/EU.
The court also ruled that the effects of this judgment should not be limited to future infrastructure use contracts yet to be concluded but also to those concluded in the past.
Consequences of the CJEU's decision
On 22 July this year, the Federal Network Agency revoked its previous approval of the track access charges (TACs) for the 2026 train path pricing system of DB InfraGO AG and DB Regio Netz Infrastruktur GmbH and approved new charges. TAC for long-distance passenger rail services and rail freight services have been reduced compared with the charges previously approved for 2026. In contrast, charges for local and regional passenger rail services have risen, following the CJEU decision (see the Federal Network Agency press release: Bundesnetzagentur - Press - Bundesnetzagentur approves track access charges for 2026 following judgment of the European Court of Justice),
In addition, the Cologne Administrative Court is expected to rule on the 2026 track access charges scheme this summer, in light of the CJEU’s decision.
Furthermore, discussions are underway to redesign the track access charges system in Germany.