The biggest tobacco tax reform in a decade brings drastic price hikes for cigarettes and the first excise duties on e-cigarettes, heated tobacco, and nicotine pouches. Croatia ranks among the EU countries with the highest smoking rates.
The Union is gearing up for the most significant change in tobacco tax policy in the past ten years. As reported by Euronews, the draft amendment to the Tobacco Taxation Directive includes higher rates for cigarettes and, for the first time, minimum taxes for e-cigarettes, heated tobacco, and nicotine pouches.
After the European Parliament failed to reach an agreement on its position in June 2026, talks are continuing in the EU Council, where unanimity among all member states is required. The European Commission has found that the old rules helped reduce smoking of traditional cigarettes but are now outdated as the use of new nicotine products is rapidly expanding, especially among young people.
In the EU, around 300 billion cigarettes are sold annually, and 24 percent of the population smokes. There are significant differences among countries: from 8% of smokers in Sweden to 37% in Bulgaria. Croatia and Greece are among the countries with total smoking rates exceeding 35%, while in the Netherlands it is around 11% and in Denmark 14%.
This places a heavy burden on healthcare systems, as treating smoking-related heart disease and chronic lung conditions costs public health budgets approximately 25 billion euros annually.
In the EU, around 700,000 tobacco-related deaths are still recorded each year. Professor Martin McKee, strategic adviser to the European Public Health Association, told Euronews that tobacco remains one of the leading preventable causes of cancer and heart disease.
While traditional smoking is most prevalent among those aged 25 to 54, younger generations are increasingly turning to e-cigarettes, heated tobacco products like IQOS, and nicotine pouches. Although these products are considered less harmful than traditional cigarettes, they are not without risks. Health organizations highlight potential harmful substances, and nicotine is highly addictive; exposure during adolescence can affect brain development and increase the likelihood of long-term addiction.
More than 11% of young people aged 13 to 15 use tobacco or products like flavored e-cigarettes.
McKee warned that even delaying major tobacco control measures for a few years leads to millions of additional smokers over time, along with preventable diseases and deaths.
The EU aims to create a 'tobacco-free generation' by 2040, meaning reducing the share of smokers to less than 5% of the population. Brussels, however, cannot completely ban smoking because health policy falls under the competence of member states. Nevertheless, it can use tax and regulatory measures to influence the sale and promotion of tobacco products.
According to Commission estimates, existing regulations have failed to close all the gaps that have allowed the growth of new nicotine products, although past actions have already reduced the percentage of adult smokers from 28% to 24%.
The Commission's new proposal envisages a substantial increase in minimum excise duties. For traditional cigarettes, the minimum excise duty would rise by as much as 139%, which would also push up the minimum retail price. For the first time, mandatory minimum excise duties would be introduced for e-cigarettes, heated tobacco, and nicotine pouches, and raw tobacco would be included in the European electronic tracking system to combat the black market and cross-border tax evasion.
Several member states are not waiting for a common European solution. Belgium became the first EU country to ban the sale of disposable e-cigarettes, and France followed suit, with additional restrictions prohibiting smoking in public places such as parks, beaches, and areas around educational institutions. The Netherlands has introduced bans on almost all e-cigarette flavors except tobacco, and is currently considering raising the minimum age for purchasing nicotine-containing products from 18 to 21.
If all EU member states unanimously support the new directive, it will also impact the tobacco industry, which generates annual sales of approximately 130 billion euros in the EU. For consumers, the most visible change would be significantly higher prices for cigarettes and many alternative nicotine products.
