Tallink warns end of ferry aid could put jobs at risk

Tallink and the Estonian Seafarers’ Union say the government’s decision not to continue a support scheme for passenger shipping could lead to ships and jobs moving from the Estonian flag. Infrastructure Minister Kuldar Leis said the government may develop a new maritime support measure focused on green fuels, ERR reported.

The government removed the passenger-shipping aid from its plans in a new budget strategy agreed earlier this week. Budget documents project savings of nearly 10 million euros a year from 2027 to 2030 by not continuing the measure.

Tallink chief executive Peep Jalakas said the decision could harm the company’s sustainability and Estonia’s maritime sector. The company regularly considers whether to reflag ships, he said, adding that the absence of support makes such a move more likely. He did not say how likely Tallink was to move any ships.

A year ago, the seafarers’ union said Tallink could move its ferry Victoria from the Estonian flag, putting 300 jobs at risk.

Jalakas and union leader Jüri Lember said rising costs were adding pressure. Marine fuel costs were nearly double their level at the start of the year, Jalakas said, while carbon charges had applied to all passenger shipping since the beginning of the year, adding costs of millions of euros to the company.

Lember said the departure of one ship could reduce tax receipts by around 10 million euros. He added that workers might not change their country of residence, but said the potential tax impact should be considered.

The governing coalition promised about a year and a half ago to restore the support scheme to protect Estonia’s competitiveness and jobs. Parliament voted against restoring it last year. The measure remained in the state budget strategy until this week, with plans previously allowing for annual spending of 10 million euros.

Leis said the decision on whether to reflag ships ultimately rested with Tallink. He said the government was in regular contact with maritime companies and wanted to develop a new support measure for the sector.