Railways Bill Update: Rail reform and decarbonisation

The Railways Bill, currently before Parliament, represents a significant structural reform of the UK rail sector. 

As well as establishing Great British Railways (GBR) which will act as the “single point of leadership” for Britain’s railways, the Bill contains several provisions that directly engage with the UK's decarbonisation targets. For operators and infrastructure planners, understanding how these provisions interact with environmental policy, and what this means in practice, will be critical.

A statutory framework for environmental consideration

Section 18 of the Bill places general duties on Ministers, GBR and the Office of Rail and Road (ORR) to exercise their railway functions in a way “best calculated to be in the public interest”. Crucially, the Bill defines "public interest" as including the effect of the provision of railway services on the environment. This means GBR and ORR will need to account for environmental impact when making decisions. Therefore, operators and infrastructure planners will need to factor these considerations into business cases, investment decisions and network planning.

The Long-Term Rail Strategy

Under section 15 of the Bill, the Secretary of State must publish a Long-Term Rail Strategy (LTRS) for the development and use of the railway network and services in Great Britain. This is expected to be published in Autumn 2027. 

The Department for Transport (DfT) published a briefing paper on 16 September 2026 setting out the proposed content of the LTRS, including five strategic objectives. One of these is supporting the Government’s sustainability targets by focusing on modal shift, rail net zero, biodiversity protection, addressing air pollution and climate adaptation. 

Delivering a net zero railway network by 2050 is a key part of the DfT’s wider transport decarbonisation plan, which also sets out ambitions to remove all diesel-only trains from the network by 2040, support the development of battery and hydrogen trains, and improve rail journey connectivity with walking, cycling and other modes of transport.    

The LTRS should therefore assist in translating the environmental considerations contained in the Bill into long-term strategic priorities, providing greater clarity on future investment and decarbonisation objectives.

Freight growth and modal shift

The Secretary of State for Transport recently announced a new interim target of at least a 40% increase in rail freight volumes by 2040, measured in net tonne kilometres, as a milestone towards the longer-term target of at least 75% growth by 2050. 

Section 17 of the Bill gives this ambition a statutory footing by requiring the Secretary of State to publish a target to increase the use of the railway network for the carriage of goods. GBR must have regard to that target when exercising its statutory functions.

We have written previously about the wider benefits that may come from rail freight growth opportunities as part of multi-modal solutions. 

Despite the Transport Committee’s recommendation that a parallel passenger growth target should also be included in the Bill, the Government considers that GBR's duty to promote the interests of users and potential users of the railway set out in section 18, already provides sufficient incentive to drive passenger growth. There is therefore no such target included in the Bill.

Electrification, rolling stock and track access charges

The integration of track and train under GBR creates a unique opportunity to develop a joined-up electrification and rolling stock strategy. With a single body responsible for both infrastructure and train operations, there is scope for more coordinated investment in electrification. Projects such as the £1 billion TransPennine Express project - Britain's first mainline battery-electric train fleet, on which Burges Salmon advised - illustrate the scale of investment already underway in this area.

The Bill's charging provisions also offer a potential means of advancing decarbonisation. Under section 64, GBR's charging scheme may provide for lower charges where GBR considers this appropriate, including to encourage new services or for "any other reason". In principle, this flexibility could be used to incentivise the operation of electric trains. This would build on the precedent set by Network Rail's track access charge discount scheme, introduced in August 2024, which offers discounted track access charges to train operators, encouraging modal shift from road to rail and reducing carbon emissions. 

Electricity demand

Realising the Government’s electrification ambitions – in relation to rail services and beyond – will require continued investment in the UK’s electricity network and generation projects. In 2025, it was reported that total traction electricity consumption (rail and freight combined) was 4,098 million kilowatt hours. At the time of that report, 39% of the track in GB was electrified with 70% of the rail fleet being made up of electric vehicles – as electrification of routes and vehicles continues at pace, the traction electricity demand is expected to materially increase. 

This tracks general trends in the UK – the connections queue for projects with an electricity demand (including, for example, electric vehicle charge points, battery storage projects and data centres) is large and growing, with the availability of grid connections and increased capacity regularly being reported as one of the primary blockers to wider electrification of road fleets. There are currently no mechanisms to allow Ofgem or the National Energy System Operator to prioritise strategically important demand projects, although Ofgem is currently consulting on potential reforms to the demand connections process.   

Looking ahead

Taken together, these provisions create a legislative framework that aligns the reformed railway with the UK's environmental targets. For operators and infrastructure planners, the key challenge will be aligning investment and operational strategies with GBR's evolving decarbonisation priorities – as well as the UK’s path to net zero more generally. It will be important to monitor these developments closely as the Bill progresses through Parliament.

If you have any queries in relation to this article or rail reform, please contact Lydia Cullimore, Charlotte Robinson or a member of the Burges Salmon rail team.