Despite a coalition pledge to reinstate the measure, parliament rejected it last year. The government has now also removed it from its state budget strategy, saving nearly EUR 10 million annually from 2027 to 2030. Estonia’s Infrastructure Minister Kuldar Leis previously warned that losing Estonian ships and jobs to neighbouring countries could cost almost EUR 54 million a year in tax revenue. This is reported by the Estonia public service media ERR.

Tallink CEO Peep Jalakas said the decision increases the likelihood of reflagging vessels, although the company will avoid hasty decisions. The Seamen’s Independent Union of Estonia previously warned that reflagging VICTORIA I could affect 300 jobs. Union leader Jüri Lember estimated that losing just one vessel could reduce annual tax revenue by around EUR 10 million.

The warnings come amid mounting operating costs. According to Jalakas, marine fuel costs have nearly doubled since the start of the year, while carbon charges are adding millions of euros to passenger shipping costs.

Leis said Estonia must balance maritime competitiveness with reducing its budget deficit. The Ministry of Climate is seeking European Commission state aid approval for an alternative scheme supporting companies using more environmentally friendly fuels. If approved, the ministry intends to seek around EUR 10 million annually from future state budgets, broadly matching the abandoned passenger shipping measure.

© Shippax