State planning to entice shipping companies to rebuild their ships in Estonia

TALLINN - The Ministry of Climate is planning to invest 25 million euros from CO2 funds to attract shipping companies to choose the Estonian maritime industry to make their ships more environmentally friendly.

The support measure being created will allow projects worth up to 170 million euros to be brought to Estonia. The minister of infrastructure sent the conditions of the support to the ministries for approval on Thursday.

According to Minister of Infrastructure Vladimir Svet, the support will contribute to both economic recovery and meeting climate goals.

"Our goal is to attract regional and international companies to Estonia to rebuild their ships. To do this, we will reimburse part of the expenses incurred here, similar to the logic of the film fund. In this way, we will bring in additional investments, help maintain and create jobs in the maritime sector, and support economic development. In the maritime sector, we compete not with our neighbors, but with other regions, and we must be proactive in developing the maritime industry in Estonia and the whole of Europe," the minister said.

The Ministry of Climate has estimated that by distributing 25 million euros as an approximately 15 percent subsidy, it would be possible to bring shipbuilding projects to Estonia for nearly 170 million euros, and the amount invested in the measure could be returned almost two-fold in tax revenues. Several international organizations estimate the global shipping decarbonization market to be nearly three trillion euros by 2050.

The support measure is intended for both Estonian and foreign shipping companies.

"With this measure, we can, among other things, introduce and internationally present the Estonian maritime industry, which has all the prerequisites to offer high-quality conversion services to shipping companies -- we have industrial companies with global experience, the necessary infrastructure and a strategic location," Kaupo Läänerand, deputy secretary general for maritime affairs and the aquatic environment at the Ministry of Climate, said.

"This is also a mitigation measure for shipowners whose ships were included in the European Union's emissions trading system," the deputy secretary general added.

The investments will be made from the proceeds of greenhouse gas emissions trading, or CO2 funds. The Ministry of Climate plans to launch the measure in early April this year.