Earlier this year Germany informed the commission of the scheme to provide public support for freight transport by rail, which will run from 2018 to 2023. In July Brussels pledged to support the scheme.

The €350m of public funding was approved under EU aid rules on 10 December.

Commissioner Margrethe Vestager said: “"Promoting the shift of freight transport from road to rail is one of many measures that Europe needs to take to help improve reduce our environmental footprint.

“The German aid scheme does exactly that – it supports this shift, ensures benefits are passed to customers and will contribute to meeting the EU's environmental and transport objectives, without unduly distorting competition.”

Under the German scheme, rail freight operators will be compensated for up to 45% of their track access charges, such as the charges that railway undertakings have to pay or the use of the rail network.

It is expected that the rail freight operators benefiting from the scheme will pass on gains to their customers, the commission said. This could for example be through lower prices of shipping.

“Rail freight operators will be obliged to inform their customers of the fact that their track access charges have been significantly reduced,” the commission said.