The proposal to amend the Directive on the taxation of tobacco products introduces, for the first time, minimum taxes on e-cigarettes, heated tobacco, and nicotine pouches, with negotiations continuing in the EU Council.
The minimum excise duty on traditional cigarettes in the European Union could rise by 139 percent. The European Commission has proposed an amendment to the Tobacco Taxation Directive (TTD), as reported by Slobodna Dalmacija and Euronews on August 19, 2026. The proposal also introduces, for the first time, minimum excise duties on e-cigarettes, heated tobacco, and nicotine pouches across the entire EU.
Negotiations are underway in the EU Council, and unanimous agreement from all 27 member states is required for adoption. The European Parliament did not approve its position in June. The Commission assesses that current regulations have contributed to reduced smoking of traditional cigarettes but are no longer adequate for a market where the use of new nicotine products, especially among young people, is rapidly expanding.
Approximately a quarter of Europeans still smoke or regularly consume tobacco products. Around 300 billion cigarettes are sold annually in the EU. Differences between countries are significant, with smoking rates as low as 8 percent in Sweden and as high as 37 percent in Bulgaria.
Croatia and Greece report overall smoking rates above 35 percent. The Netherlands stands at about 11 percent, and Denmark at 14 percent.
According to the World Health Organization (WHO), 11.6 percent of teenagers aged 13 to 15 in the European region use products such as vapes, heated tobacco, or nicotine pouches. Slobodna Dalmacija reports that among young people of the same age, more than 11 percent use tobacco or flavored e-cigarettes. Sources disagree on the exact percentage, but both warn of a growing trend among adolescents.
Smoking causes about 700,000 deaths annually in the EU. Treating cardiovascular and chronic lung diseases linked to smoking costs public health budgets around 25 billion euros each year. Traditional smoking is most prevalent among individuals aged 25 to 54, while younger generations are increasingly turning to e-cigarettes, heated tobacco like IQOS, and nicotine pouches.
The EU aims to create a "tobacco-free generation" by 2040, reducing the share of smokers to less than 5 percent of the population. Brussels lacks the authority to impose a complete smoking ban because health policy lies with member states. Nevertheless, through tax and regulatory measures, it can influence the sale and advertising of tobacco products.
In addition to raising the minimum excise duty on traditional cigarettes by 139 percent, the proposal introduces, for the first time, mandatory minimum excise duties on e-cigarettes, heated tobacco, and nicotine pouches. Raw tobacco would be included in the European electronic tracking system, aiming to reduce the black market and cross-border tax evasion.
The tobacco industry in the EU generates annual sales of around 130 billion euros. With unanimous support from member states for the new directive, both industry and consumers will feel the consequences. For consumers, the most noticeable change would be significantly higher prices for cigarettes and many alternative nicotine products. The next step in the process has not yet been announced.
