Estonia removes passenger shipping support from budget plans — ERR News

In Estonia, the government has removed the passenger shipping support mechanism from the new state budget strategy. Tallink and the Estonian Independent Seamen's Union said that this decision could increase the likelihood of transferring some vessels, along with their crews, from under the Estonian flag, ERR News reports.

Support removed from budget plans

A year and a half ago, the Reform Party and Eesti 200 included a promise to restore the passenger shipping support mechanism in their coalition agreement. It was intended to help preserve Estonia's competitiveness compared with neighboring countries and jobs on vessels flying the Estonian flag.

Last year, the Riigikogu did not restore this mechanism, but the support remained in the state budget strategy. Around €10 million annually had been planned for it. At the beginning of the week, the government approved a new budget strategy from which this measure was officially removed. Accompanying documents to next year's budget bill provide that this will make it possible to save nearly €10 million per year in 2027–2030.

Tallink cites risks

Tallink CEO PEEP JALAKAS said that the company is constantly assessing the possibility of transferring its vessels from under the Estonian flag, and that not extending the support makes such a scenario more likely. According to him, this could jeopardize jobs and the long-term future of the country's maritime sector.

More current news is available on the UA.News Telegram channel Telegram.

A year ago, the seamen's union suggested that Tallink could transfer the Victoria ferry from under the Estonian flag; this could affect around 300 jobs. Jalakas did not specify the likelihood of transferring particular vessels, but noted that the company is not planning hasty decisions.

Union head Jüri Lember said that transferring even one vessel could mean the loss of approximately €10 million in tax revenue. Tallink also points to rising costs: the price of marine fuel has nearly doubled compared with the beginning of the year, and passenger shipping is subject to carbon taxes.

A different aid scheme is possible

Infrastructure Minister Kuldar Leis said that Estonia is seeking permission from the European Commission for state aid to companies using more environmentally friendly fuel. If approved, the government plans to seek funding for this in the state budget. According to the Ministry of Climate's estimate, such support could amount to around €10 million per year.