The government has set a new target to increase rail freight by at least 40% by 2040, as part of plans to strengthen supply chains, ease road congestion, cut carbon emissions and boost the UK economy.

The target, announced today (8 September), is the first milestone towards the government’s ambition of increasing rail freight by at least 75% by 2050. The plan will be overseen by a new public body dubbed Great British Railways.

If the targets are met it will see road freight movements cut significantly over the coming decade. Announcing the plan the DfT said: “Rail freight helps businesses move goods efficiently across Britain, eases pressure on the road network and produces significantly less carbon than moving the same freight by road.

“Meeting the new target could save up to one million tonnes of carbon dioxide every year compared with transporting the same goods by road.”

Rail freight already carries goods worth almost £34bn each year to the UK’s economy. Meeting the new target would increase this figure by around £15bn.

Network Rail estimates the new targets could increase rail freight movements of construction materials by 45% and boost the movement of goods like cars, wine, white goods and medicine by around two-thirds.

Transport Secretary, Heidi Alexander, said: “Great British Railways will have a clear mission to help grow our economy by moving more of the goods British businesses rely on.

“Our new target gives the rail freight industry the certainty it needs to invest, helping businesses move more products, deliver the materials needed to build new homes and infrastructure and support jobs across the country.”

The Railways Bill, which establishes Great British Railways, begins its committee stage in the House of Lords today. The bill will give Great British Railways the powers it needs to deliver on the new freight target, including strategic oversight of network access and two clear duties to support freight growth.

A dedicated member of the Great British Railways board will also have responsibility for freight, ensuring the needs of freight operators and the businesses they serve are embedded in decision-making from the outset.

These changes will help Great British Railways work more closely with freight operators to unlock additional capacity on the network, support investment, strengthen supply chains and help drive economic growth across Britain.

Jeremy Westlake, Network Rail chief executive, said: “Rail freight is a vital part of our transport network and the UK economy, moving millions of tonnes of goods every day – putting food on our supermarket shelves, delivering the materials that build our homes and critical infrastructure and much more besides.

“Increasing the role of freight on the railway is not just good for economic growth; it reduces congestion on our roads, cuts carbon emissions and supports our ambition to build a cleaner, more resilient transport system.

“We fully support the government’s target, which sets a clear direction of travel and rightly demonstrates just how critical the role of rail freight is and we will continue to work with partners to make this ambition a reality.

Maggie Simpson, Rail Freight Group director general, said: “We welcome this announcement as a further signal of government’s commitment to growing rail freight.

“There are huge opportunities for moving more goods by rail and the sector stands ready to fulfil government’s bold targets for growth, making an even stronger contribution to the nation’s productivity, development and resilience.”