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 tries to get onto the train, but it leaves too fast, so Hero Boy, under a suggestion by Know-It-All, pulls the emergency brake to stop the train and let Billy on board. The Conductor, however, not knowing his real intentions, was angry with Hero Boy, thinking he was either playing with the brake or trying to keep the train from reaching the North Pole, before Hero Girl explains the situation and shows Billy in the observation car. The Conductor sees Billy taking a seat and lets Hero Boy off with a reminder of the train's tight schedule.
Later, Hero Boy was about to pull the emergency brake again to stop the train for Hero Girl, whom he and Know-It-All thought was going to get thrown off the train due to her having lost her ticket, but he stops when he finds her ticket stuck in the air vent, grabs it and goes after Hero Girl and the Conductor.
At the North Pole, when the observation car gets uncoupled from the rest of the train and rolls down a hill, 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. Hero Boy turns the wheel, which applies the brakes and stop the car just as it gets onto the turntable.