From road to rail: advancing low-carbon freight transport

In March 2020, the European Parliament adopted the European Climate Law, which mandated that the EU should cut net greenhouse gas emissions by at least 55% by 2030 and achieve climate neutrality by 2050. The transport sector, particularly road transport, is a major source of emissions, accounting for 73.2% of total transport emissions in 2022¹. Despite improvements in the efficiency of truck trailers, total emissions have not decreased due to rising freight demand.

By 2023, only 2% of truck trailers were transported by rail² due to technological and economic challenges. The freight rail industry has declined as railways have withdrawn from unprofitable routes, making road transport a more cost-effective option. Furthermore, infrastructure issues prevent most of the trailers in Europe from being lifted by crane, rendering rail transport costly without substantial investment in loading terminals.

The EU aims to reverse this trend by doubling the modal share of freight rail by 2030, with the intention of reducing CO₂ emissions and alleviating major roads congestion.

Shifting from land to rail freight transportation

In this context, Helrom, founded in 2018 and based in Frankfurt, Germany, provides an alternative method of rail transportation for truck trailers. As a licensed rail-road operator, the company owns patented wagon technology that allows semi-trailers to be loaded efficiently onto rail wagons without the need for cranes or extensive terminal infrastructure. With its globally patented freight wagon technology, Helrom enables truly barrier-free switching between road and rail for the first time in European long-distance logistics, eliminating the need for major investments in loading terminals and bringing services closer to customers.

Societe Generale acted as Mandated Lead Arranger, Lender, Green Loan Coordinator, Facility and Security Agent, and Hedge Counterparty for Helrom's acquisition of 120 six-axle double-pocket wagons. This transaction marks Helrom's second debt raising, following its initial financing in April 2023. It underscores Societe Generale's strong partnership with Helrom and its ongoing support to low-carbon growth and innovation in European freight transport.

The financing has been structured as a Green Loan in line with the Loan Market Association (LMA) Green Loan Principles. This significant transaction highlights Societe Generale's expertise in rail financing, particularly in the intermodal sector, and its capability to provide tailored financing solutions for transition emerging leaders.

Helrom's transport solution not only features innovative and adaptable technology but also has the potential to cut CO₂ emissions by up to 90% compared to traditional truck transport with operating costs comparable to those of road transport. Currently, 75% of European freight is transported by road. With each wagon capable of carrying two trailers, and trains consisting of 18 to 20 wagons operating routes between Germany, Austria, Hungary, and Italy, Helrom could facilitate the transportation of approximately 30% of European freight volumes and thus playing a key role in enabling the transition to a more low-carbon economy.