Our Corporate Governance

Future – Regulatory assumptions

‘Noise’ Technical Specifications for Interoperability (NOI TSI)

Since 2007, in accordance with the Technical Specifications for Interoperability for Freight Wagons (WAG TSI) and the Noise TSI for Rolling Stock (NOI TSI), all new freight wagons and retrofitted freight wagons have to comply with certain requirements regarding the emission of pass-by noise (noise while in transit). As a result of the above mentioned regulations, since 2007 freight wagons have been equipped with K type composite brake blocks instead of cast iron brake blocks. Wagons are modernized using LL-blocks.

A limited revision to the Noise TSI is currently finalized; its goal is for the TSI to cover the entire fleet of standard-gauge freight wagons in the European Union. The initial proposal of the European Commission was for the Noise TSI requirements to cover all wagons in international transport from 2022 and in national transport from 2026. During the preparatory phase, various dates were analyzed for the two existing strategies to cover the existing freight wagons with Noise TSI requirements:

  • “wagon (rolling stock) strategy” in which wagons and trains in international transport would be made quieter first and then also trains in domestic traffic;
  • “quieter routes strategy”, in which there would be so-called “quieter routes”, i.e. routes with a specified level of cargo traffic, at night and in areas with a certain population density, on which only “quiet trains” could run

Under the current “final draft” of 9 March 2018 of the revised Noise TSI, the revised Noise TSI would apply to the existing standard-gauge freight wagons in the following scope:

  • From 8 December 2024 freight wagons that do not comply with the Noise TSI requirements concerning pass-by noise will no longer be allowed to operate on quieter routes as defined in the draft Noise TSI.
  • The “quieter route” is defined as part of the network with a minimum length of 20 km along which, in the year preceding the date of publication of the regulation revising TSI Noise, the annual average of freight trains running on the line per night will be more than 12.(according to the 2016 freight traffic analysis on the PKP PLK S.A. railway network, most of the rail lines of importance for freight traffic in Poland should be designated as quiet);
  • The draft revision contains “Specific cases” concerning the operation of freight wagons on quieter routes, including “Specific case Poland”, which, among other things, will allow freight wagons equipped, among others, with cast iron brake blocks and rim wheels to run on “quieter routes” on the territory of Poland until 31 December 2036:

“Specific case Poland

(“T”) in the list of wagons specified in item 7.2.2.2, the following existing wagons may be operated on quiet routes in the territory of Poland:

  • Wagons with tyred wheels, until January 2037
  • Wagons with the 1Bg or 1Bgu brake configuration equipped with cast iron blocks
  • Wagons designated for “S” traffic equipped with “SS” brake with cast iron brake blocks
  • Wagons equipped with cast iron brake blocks designated for “SS” traffic, in which retrofitting LL brake blocks would require installation on wheels consistent with the EN 13979-1 standard and a kink valve”.

The ERA (European Union Agency for Railways) recommendation on the revision of the Noise TSI was to be sent to the European Commission together with the accompanying report and impact assessment in April 2017. The amended Noise TSI application guide should be available in October 2018. The Railway Interoperability and Safety Committee is expected to issue an opinion on the draft revision of the Noise TSI in November 2018. The entry of the revised Noise TSI into force is scheduled for the turn of 2018 and 2019.

Some railways – in particular those from countries demanding an early entry of a ban on noisy trains into force on their rail networks (Austria, Netherlands, Germany, Switzerland) – have taken steps to persuade the European Commission to change the strategy to cover the existing freight wagons by the revised Noise TSI requirements from the “quieter route strategy” to the “wagon strategy”, or to modify the “quieter route strategy” in line with the interests of these Member States. PKP CARGO is actively monitoring their activities.

Another threat for PKP CARGO S.A. is the commencement of works on the revision of EU regulations concerning the differentiation of track access rates depending on emitted train noise and demands of some countries (e.g. the Netherlands) and railways (e.g. ÖBB) to make these regulations obligatory in the EU in order to provide financial incentives for “quieter” trains. If such a solution is implemented then “noisy” trains in Poland would incur higher costs of access to railway tracks, despite the adoption of the above mentioned Specific cases for Poland in the Noise TSI.

Service Infrastructure Facilities

The act of 16 November 2016 on amendment to the act on rail transport and certain other acts entered into effect as of 30 December 2016. The purpose of the act is to adjust the national legal order in the field of rail transport to the changes resulting from the Directive 2012/34/EU of the European Parliament and of the Council of 21 November 2012 establishing a single European railway area and the Directive 2008/57/EC of the European Parliament and of the Council of 17 June 2008 on the interoperability of the rail system within the Community (EU L 191 of 18 July 2008, p. 1, as amended). The act specifies among others a new group of facilities, the so-called service facilities designated for the provision of services necessary to perform the transport process.

In connection with the amendment, in 2017 the Company introduced a number of organizational changes in order to appoint the service facility operators.

Another legal act regulating the operations of the service facilities in detail, i.e. the Commission Implementing Regulation (EU) 2017/2177 of 22 November 2017 on access to service facilities and rail-related services (regarding art. 13 “Conditions of access to services” of the directive 2012/34/EU) entered into effect on 13 December 2017. In 2016 and 2017, the Company participated in the works of the legal group of CER (Community of European Railway and Infrastructure Companies) which presented to the European Commission a number of the Company’s postulates. They are to some extent taken into account in the Regulation.

Since the Regulation will enter into effect as of 1 May 2019, the Company expects to introduce further changes to its operations so as to adjust to the a/m document.

EU Emissions Trading Scheme (EU ETS)

One should also consider the planned changes in the EU Emissions Trading Scheme (EU ETS) – the related uncertainty was the reason why the Company’s client, ArcelorMittal Poland (AMP), suspended its decision to overhaul the blast furnace no. 2 in Dąbrowa Górnicza. Early in 2018, the Company announced the phasing out of the furnace in mid-year for over a month and performing a partial repair which is likely to lengthen the furnace useful life by ca 4–5 years. This will make it possible to assess the financial impact on AMT of the amendments to the EU ETS to become effective in 2021. Only then will it be known whether a general overhaul of the blast furnace is economically viable.

The announced overhaul and the resulting phasing out may influence transportation services provided by PKP CARGO S.A. to AMP.