The European Commission has unveiled a long-awaited overhaul of the Tobacco Taxation Directive (TTD), a move that would sharply increase the price of cigarettes and, for the first time, impose EU-wide minimum taxes on newer nicotine products such as vapes, heated tobacco devices, and nicotine pouches. The plan, which still requires unanimous approval from all 27 member states, is seen as a test of how far the bloc can go in using fiscal policy to curb tobacco use.
Under the proposal, the minimum excise duty on a pack of cigarettes would jump by 139 percent. That would push the price of a typical pack in low-tax countries like Bulgaria or Poland significantly closer to the levels seen in France or Ireland, where a pack already costs over €10. The Commission argues that higher prices are one of the most effective ways to discourage consumption, especially among younger people who are more price-sensitive.
A new frontier: taxing nicotine alternatives
The most innovative part of the plan is its attempt to bring novel nicotine products into the tax net. Currently, these products are either untaxed or taxed inconsistently across the EU. The Commission wants to set a minimum excise rate for e-liquids, heated tobacco, and nicotine pouches, which have exploded in popularity over the past decade. According to the World Health Organization, 11.6 percent of teenagers aged 13 to 15 in the European region already use such products.
“We need to close the regulatory gap that has allowed a new generation to become hooked on nicotine through products that were not on the market when the current rules were written,” said a Commission official familiar with the proposal. The plan also includes extending the EU’s tobacco tracking and tracing system to these new products, a measure aimed at curbing the illegal trade that thrives on cross-border price differences.
The numbers behind the current crisis are stark. Around 24 percent of Europeans still smoke, and roughly 300 billion cigarettes are sold in the EU every year. Smoking-related illnesses account for about 700,000 deaths annually and cost national health systems an estimated €25 billion. While existing tobacco rules have helped reduce smoking rates over the decades, they have not kept pace with the rise of online marketing and the proliferation of flavoured vapes that appeal to minors.
The proposal has already drawn fire from both ends of the political spectrum. Public health advocates argue that the tax increases are not steep enough, pointing to countries like Australia, where plain packaging and high taxes have driven smoking rates to record lows. On the other side, some member states with significant tobacco industries, such as Poland and Romania, worry about the economic impact on farmers and manufacturers. The tobacco industry itself has warned that higher taxes will fuel smuggling, though the Commission counters that the expanded tracking system will mitigate that risk.
If adopted, the revised directive would not only raise the price of cigarettes and many alternatives but also increase compliance costs for tobacco companies, which would have to adapt to new reporting and tracing requirements. For consumers, the change would be most visible at the till: a pack of cigarettes in a country like Bulgaria, where the average price is around €3, could rise by more than a euro overnight.
The proposal is part of a broader European push against smoking, which includes Spain's recent plan to ban smoking on terraces and beaches. It also comes as new research highlights the health risks of tobacco, including a study linking genetics to smoking-related cancer risk and another showing that smokers underestimate the cardiovascular toll of tobacco.
Yet the road to adoption is long. Tax matters require unanimity, meaning every member state from Lisbon to Tallinn must agree. The Commission hopes to reach a political deal by 2026, but negotiations could drag on, especially if countries like Ireland, which already has high taxes, push for even higher minimums, while others resist any increase. The uphill battle is a reminder that in the EU, fiscal harmonisation is never simple.
For now, the message from Brussels is clear: the EU cannot ban smoking outright, but it can make it a habit that fewer people can afford. Whether that is enough to reverse the tide of vaping among the young remains an open question.
