The Emergency Brake is a brake that brings the entire train to a quick complete stop, but it is supposed to only be used for emergency purposes.
In the film, Billy, who first declines to board after meeting the Conductor, has second thoughts, and tries to board the train, but it leaves too fast, so the Hero Boy, under the suggestion by the Know-It-All kid, pulls the emergency brake to stop the train and let Billy on board. The Conductor, however, not knowing his real intentions, confronts the Hero Boy, thinking he was either tampering with the brake or trying to keep the train from reaching the North Pole, before the Hero Girl steps in and confesses about the situation, and shows Billy in the Observation Car. The Conductor sees Billy taking a seat in the observation car and lets the Hero Boy off with a reminder of the train's tight schedule.
Later, the Hero Boy was about to pull the emergency brake again to stop the train for the Hero Girl, who lost her ticket that was not punched after delivering some hot chocolate to Billy in the observation car, whom he and the Know-It-All kid thought was going to get thrown off the train due to her having lost her ticket, but he stops when he finds her ticket hanging in an air vent above the brake, grabs it, and goes after the Hero Girl and the Conductor navigating the snow-covered roofs of the train.
At the North Pole, when the observation car is detached from the rest of the train and rolls down a hill very fast, the Hero Boy tries finding an emergency brake to stop, but he cannot find one. Suddenly, the Hobo appears and taps the manual brake wheel before disappearing. The Hero Boy turns the wheel, trying to stop the car, only to be too late when the car crashes when onto the turntable.