USA Law and Practice Contributed by: John D. O’Neill, Jr., David B. Horner, Andrej Micovic and Ryan Pedraza, Hunton Andrews Kurth LLP
service, access and rates. While US freight railroads are typically vertically integrated and control access to their networks, regulatory mechanisms exist to address unreasonable practices and certain competi - tive issues. Road infrastructure presents fewer access-related competition concerns because public roads are available on a non-discriminatory basis. Competition issues in the road sector are therefore more likely to arise in connection with transportation services, logis - tics operations or mergers rather than infrastructure access. 7.3 State Aid and Subsidies Unlike the European Union, the United States does not maintain a comprehensive state aid regulatory regime. Federal, state and local governments may provide grants, subsidies, tax incentives, credit assis - tance and other forms of support for transportation projects. Such assistance is evaluated under constitutional, statutory and procurement principles rather than a dedicated state aid framework. Federal transporta - tion programmes routinely provide significant finan - cial support for infrastructure development through grants, loans and credit enhancement mechanisms. Government support nevertheless remains subject to various legal constraints, including appropriation requirements, procurement rules, and conditions attached to federal funding programmes. 7.4 Vertical Integration Vertical integration is widely accepted within the US transportation sector. The freight rail industry provides the most prominent example, as major railroads own infrastructure, operate trains and provide transporta - tion services through integrated business models. Regulators have historically viewed vertical integration as a defining characteristic of the US freight rail system rather than a competition concern in itself. Regulatory scrutiny focuses on specific anti-competitive conduct, access disputes or merger-related issues rather than requiring structural separation between infrastructure ownership and transportation operations.
In the road sector, vertical integration issues arise less frequently because infrastructure is publicly owned and transportation services are provided by numer - ous private operators. P3 concession structures also involve regulatory oversight and contractual controls designed to protect public access and service objec - tives. 8. Environmental Regulation and Decarbonisation 8.1 Emissions Standards Heavy-duty vehicles are subject to emissions stand - ards administered by the EPA, including requirements regarding greenhouse gases and “criteria pollutants” (six air pollutants regulated by the EPA under the Clean Air Act), while locomotives are regulated under separate EPA emissions standards applicable to rail equipment. States, particularly California and jurisdic - tions adopting California standards, may impose addi - tional requirements that significantly influence vehicle and equipment procurement decisions throughout the transportation sector. 8.2 Electrification and Alternative Fuels In general, the United States relies on incentives rather than mandates to promote electrification and alter - native fuels. Federal and state programmes support electric vehicle deployment, charging infrastructure, hydrogen development, low-emission vehicles and clean transportation technologies. While trucking electrification is receiving significant policy atten - tion, rail decarbonisation efforts currently focus on fuel efficiency improvements, battery technologies, renewable fuels and emerging hydrogen applications. 8.3 Environmental Permitting Transportation infrastructure projects frequently require environmental approvals under the NEPA, the Clean Water Act, the Endangered Species Act, the National Historic Preservation Act and various state environmental laws. Major projects often require multiple permits and agency approvals, making envi - ronmental review one of the most significant factors affecting project development schedules.
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