Abstract. This paper deals with actual European "modal shift to rail transport" concept and related environmental issues and experience in the Republic of Serbia. The planned increase in volume of railway transport and planned railway electrification should reduce air pollution in Serbia, particularly in the urban environment. On the other hand, achieving this goal would lead to the increase in noise level in the urban environment and environmental issues in the region of thermal power plants, which are the main sources of electricity in Serbia. This paper suggests concrete measures to reduce the railway carbon footprint and noise level during the planning, design and service life of railway infrastructure.