The European rail sector is essential for the transition to sustainable mobility, supporting initiatives to reduce greenhouse gas emissions and improve quality of life. Although the vital role of rail is recognised, the transport sector continues to be a major contributor to Europe’s emissions, demanding urgent innovation and technology changes. This paper presents a detailed assessment of the current landscape and future directions of rail research in Europe, highlighting the alignment with the European Commission’s Sustainable and Smart Mobility Strategy, as well as with the vision of Industry 5.0. It is highlighted the fundamental curriculum and suggest competences for PhD candidates in railway engineering, emphasising the interdisciplinary expertise required to address evolving technical, economic, and sustainability concerns. The paper concludes by identifying critical research needs and innovation opportunities that will drive the transformation of railways to meet ambitious climate and mobility targets.