Rail freight response to the Scottish Budget 2026-27
The rail freight sector recognises that the Scottish Budget 2026-27 has been set in a challenging fiscal environment, at a time of significant pressure on public finances and in the run-up to a Scottish Parliamentary election. Against that backdrop, we acknowledge that the Budget continues to prioritise investment in rail and transport decarbonisation more broadly.
The Budget commits £1.62bn to rail services, including funding for rail network infrastructure, passenger rolling stock and maintenance, alongside continued investment in electrification and the resilience of the railway. It also includes substantial support for wider decarbonisation measures, such as expanded public EV charging infrastructure, support for zero-emission vehicles, and early initiatives linked to electric HGVs, all of which are important components of the transition to net zero.
However, we remain profoundly disappointed that there is once again no funding for rail freight grant schemes, despite the significant and immediate climate benefits that come from shifting freight from road to rail.
Rail freight generates 76% less CO₂ per tonne of freight moved than the average diesel HGV, produces nearly 90% less small particulate matter, and up to 15 times less NOx. A single freight train can remove up to 129 lorries from the road, and on typical Scottish flows between 43 and 76 HGVs, delivering meaningful reductions in emissions, congestion and road wear.
The absence of funding is particularly striking given that the 2025-26 Budget included £4 million for Freight Facilities Grants, £3m of which is supporting construction of a new £11.2m rail freight terminal near Inverness. That terminal will deliver demonstrable benefits by removing lorries from the A9 once operational. The 2026-27 Budget confirms, however, that this was a single-year allocation, with no continuation.
We are also disappointed that the Mode Shift Revenue Support Grant, which continues to be funded and actively used in England to grow rail freight, has for the third year not been funded in Scotland, despite its proven effectiveness in supporting long-distance modal shift.
While active travel and electric vehicle programmes continue to grow, there remains a very strong case that removing long-distance diesel HGVs from Scotland’s roads offers one of the fastest, effective and most cost-effective climate interventions available, so rail freight’s omission is particularly curious given the Government’s stated priority for achieving net zero.
Taken together, the Budget appears to remove all explicit support for rail freight, raising concern that freight modal shift is no longer being fully recognised as part of Scotland’s climate solution. Perhaps it simply reinforces the long-standing challenge that freight doesn’t vote, meaning our value goes unrecognised? RFG will continue to work across the industry to make our case and hope this position can be revisited in future budgets, whoever the Government may be next year.
By Martin Bignell