Estonia to Help Finance Green Retrofits

Estonia has launched a €25 million ($28 million) government grant designed to encourage the reconstruction and greening of passenger and cargo ships, tugboats and other port and auxiliary vessels in Estonian ports.

This makes Estonia one of the few countries in Europe offering direct financial support in the form of state aid for ship retrofitting. The new grant, enacted by Estonia’s Minister of Infrastructure, Kuldar Leis, provides shipowners and operators with subsidies covering 15% to 30% of eligible retrofit costs, up to a maximum of €5 million per project.

For instance, to qualify for a 30% support rate, the vessel must be converted into a zero-emission ship. Additionally, factors such as the ship's flag state and how frequently it visits local ports also influence the rate of support.

"Global demand for cleaner maritime transport is growing rapidly. Estonian marine industry companies have the expertise and experience to deliver world-class retrofit services and support shipowners in making their fleets more environmentally friendly," said Minister of Infrastructure Kuldar Leis. "From design and technical consulting to implementation and maintenance, Estonian ports offer convenient and efficient hubs for retrofit projects."

For maritime companies looking to modernize their fleets, the grant creates a significant incentive to adopt greener solutions such as installing hybrid engines, adopting equipment powered by renewable fuels, or implementing exhaust gas cleaning systems. Other innovations that reduce pollution and improve energy efficiency are also eligible for support.

Kaupo Läänerand, Deputy Secretary General for Maritime and Water Affairs at the Estonian Ministry of Climate,” said: "With the maritime sector now included in the EU Emissions Trading System, this measure helps channel revenues collected from shipowners back into supporting their transition to greener technologies.”

As stricter environmental regulations loom, the need for ships capable of operating with hydrogen and electric propulsion systems, carbon capture technologies and advanced software solutions is set to grow. Estonia is prepared to meet this demand through the Estonian Marine Greentech & Retrofit Hub — a one-stop solution offering comprehensive services for green ship retrofitting.