From road to rail: advancing sustainable freight transport

In March 2020, the European Parliament has adopted the European Climate Law to tackle climate change, establishing a legally binding goal for the EU to reduce net greenhouse gas emissions by at least 55% by 2030 and achieve climate neutrality by 2050. The transport sector is a significant source of emissions, with road transport accounting for 73.2% of total transport emissions in 2022¹. Although the efficiency of truck trailers is improving with new fuel technologies, total greenhouse gas emissions have not decreased as the increases in demand for freight transport have outpaced efficiency gains.

In 2023, only 2% percent of truck trailers were transported by rail², primarily due to technological and economic obstacles. Indeed, the European freight rail industry has seen a decline due to railways withdrawing from unprofitable services, and road transport becoming more cost-effective compared to rail.

There are also infrastructure problems as most trailers in Europe cannot be lifted by crane, which makes rail transport prohibitively expensive without substantial investment in loading terminals that also require significant construction time.
The European Union has set itself the ambitious goal of reversing this trend. It plans to double the modal share of freight rail by 2030 to reduce CO₂ emissions from the transport sector and ease congestion on major roads.

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 the Group ongoing support to sustainable growth and innovation in European freight transport.

The financing has been structured as a Green Loan in line with the 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 sustainable economy.