EU Commission greenlights Luxembourg’s EUR 54 million State aid scheme for road and rail transport

Approved Luxembourg Scheme

Key features and EU Commission approval

The EU Commission’s decision clears the way for the Scheme (SA 123838), which will be legislated by bill of law 8765 (Bill of Law) submitted to Parliament on 12 June 2026, to enter into force.

The EU Commission assessed the Scheme under Article 107(3)(c) TFEU, which allows Member States to support the development of certain economic activities subject to certain conditions, as well as under Sections 1 and 2.2 of METSAF. Applying that framework, it found the Scheme to be compliant: it has a clearly defined budget, provides temporary and targeted support to a sector severely impacted by rising energy costs, and is necessary, appropriate and proportionate to facilitate the development of the relevant economic activities. On that basis, the EU Commission concluded that the Scheme does not distort competition or affect intra-EU trade to an extent contrary to the common interest, and formally declared it compatible with the internal market.

The Scheme relies on METSAF to ease the impact of higher fuel prices on the domestic transportation sector. The EUR 54 million in support will take the form of direct grants to eligible road transport and rail freight operators, calculated solely on the basis of their actual fuel surcharges incurred. The Bill of Law defines the precise activities that are eligible for the Scheme (Annex 1).

National passenger transport operators are subject to additional restrictions and may only benefit if they meet the following cumulative conditions:

• the operator is active in national passenger transport by road; and
• the operator holds a fixed-price passenger transport contract concluded before 1 March 2026.

Only fuel costs directly linked to the performance of the specific contract are eligible.

For both freight operators and passenger transport operators:

• no aid below EUR 1,000 may be granted to SMEs, and no aid below EUR 5,000 may be granted to large companies;
• the additional fuel cost borne by the company must be more than 0.1 euros per litre and is capped at 1 euro per litre; and
• the aid covers up to 70% of additional fuel costs incurred between 1 March and 31December 2026.

The Bill of Law sets out the detailed calculation methodology for eligible amounts.

Resilienzpak 2026: Luxembourg’s crisis response

The Scheme forms part of the broader “Resilienzpak 2026”, a tripartite agreement signed on 8 June 2026, which also includes measures such as reductions in excise duties, subsidies on electricity and gas prices for households, and further sectoral support. The package constitutes Luxembourg’s domestic response to the economic shock triggered by the escalation of the Middle East conflict, which caused a sharp and sustained increase in global energy and fuel prices from February 2026.

METSAF in context

The Bill of Law gives domestic effect to METSAF, the temporary State aid framework adopted by the EU Commission on 29 April 2026 enabling Member States to support the sectors hardest hit by the Middle East crisis — agriculture, fisheries, transport and energy-intensive industries.

To mitigate the risks to EU economies whilst protecting competitiveness and a level playing field within the single market, Member States may grant aid based on actual consumption levels or rely on a simplified approach for smaller aid amounts (taking into account elements such as fleet size, land area or general sectoral fuel consumption estimates, limited to EUR 50,000 per undertaking).

METSAF marks the third time in six years that the EU Commission has adopted a temporary crisis framework (COVID-19 TCF in 2020 and the Ukraine TCTF in 2022), demonstrating on each occasion its flexibility in a crisis context rather than establishing a permanent, transition-oriented framework.

Since its adoption, METSAF-based approvals have been gathering pace across the EU. Comparable schemes have been cleared for Spain (EUR 402 million for road transport), France (EUR 212 million for agriculture and aquaculture) and Ireland (EUR 85 million for agricultural fuel costs).

METSAF will be in place until 31 December 2026, notwithstanding that the EU Commission may review and amend the framework depending on the evolving geopolitical context.

What are the next steps?

Given the EU Commission’s approval, the Bill of Law is now expected to enter into force shortly. The first constitutional vote has already taken place, and the Conseil d’Etat [State Council] has dispensed with the requirement for a second vote.

Companies must submit their applications for aid no later than1 February 2027.