Brussels is bracing for a high-stakes clash over the revision of the Tobacco Products Directive (TPD) and the Tobacco Excise Tax Directive (TED). A bloc led by France and the Netherlands is advocating for tighter restrictions on e-cigarettes and nicotine pouches, while Italy and Greece insist on evidence-based policies. The outcome will not only shape the regulatory landscape for harm reduction but also determine billions in EU tax revenues.
The TPD Revision: A Pre-Emptive Strike?
The forthcoming health study by the European Commission will serve as the foundation for the revision of the Tobacco Products Directive (TPD). This directive will determine whether emerging products—such as heated tobacco and nicotine pouches—should be regulated and taxed in the exact same manner as traditional combustible cigarettes.
The tone of the debate has already been set by EU Health Commissioner Olivér Várhelyi, who controversially stated that alternative tobacco products are “as harmful as conventional cigarettes.” However, the Commission’s internal watchdog, the Regulatory Scrutiny Board (RSB), has flagged that the current evaluation report includes “forward-looking measures.” This suggests that the Commission is already paving the way for stricter regulations before the scientific evaluation is even finalized.
The Member State Divide: Ideology vs. Science
For the revised TPD to pass, it requires a qualified majority among EU member states. This has created two distinct factions:
- The Restriction Bloc: Led by France and the Netherlands, this group advocates for severe restrictions on all alternative nicotine products, regardless of their non-combustible nature.
- The Evidence Bloc: Countries like Italy and Greece—where tobacco-related investments are significant—argue that regulatory decisions must be rooted in robust scientific evidence.
Greek Health Minister Adonis Georgiadis recently stated he would oppose any “rushed decision taken for ideological rather than scientific reasons.” He emphasized that if alternative products are scientifically proven to be different from traditional cigarettes, they must be regulated differently.
The Harm Reduction Debate: The Swedish Model
A key difficulty in the debate is the relatively short time these alternative products have been on the market, leading the Commission to adopt a highly cautious approach. However, industry advocates point to real-world data.
Nathan Jones, head of EU regulatory strategy at British American Tobacco, highlighted that compelling data already exists in Sweden, Czechia, and Greece, where smoking rates have plummeted to record lows alongside the adoption of vapes and pouches. Jones warned that ignoring this data risks repeating the mistakes of Belgium and the Netherlands, where poorly designed policies have fueled a booming illegal vape market run by criminal organizations.
Conversely, French anti-tobacco groups like Contre-Feu argue that the Swedish success is due to strict adherence to WHO frameworks, not the proliferation of nicotine pouches.
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The Taxation Stalemate: The TED and TEDOR
Parallel to the health debate is a fierce battle over taxation. The Tobacco Excise Duty Own Resource (TEDOR) is crucial for the EU’s long-term budget, with Brussels aiming to raise €11.2 billion annually from tobacco taxation. The Commission has proposed a 15% levy on national tobacco tax revenues.
| Member State | Stance on Taxation (TED) |
|---|---|
| Luxembourg | Pushing for a transitional period to avoid sharp tax hikes based on purchasing power. |
| France | Advocating stricter limits on cross-border shopping to prevent revenue losses to Luxembourg. |
| Sweden | Opposing the current approach to taxing harm-reduction nicotine pouches. |
| Germany | Currently silent, but holds the decisive vote for any final agreement. |
The Looming Deadlock
The negotiations have reached a stalemate. Because unanimity is required for the TED, a single veto could derail the entire process. Attention is now turning to Wopke Hoekstra, the EU commissioner overseeing taxation policy, to bridge these deep divisions before the next ECOFIN meeting. If an agreement fails, the Commission’s annual revenue from tobacco taxes could be capped at around €5 billion, forcing member states to contribute more to the overall EU budget.
The situation may become even more complicated in July when Ireland—which boasts some of the highest tobacco tax rates in Europe—takes over the rotating EU presidency. Industry representatives warn that Dublin is unlikely to back EU tax levels below its own, risking a prolonged and costly legislative deadlock.
