The European Commission has released a sweeping proposal to overhaul the EU Tobacco Excise Directive, introducing for the first time EU-wide minimum taxes on vapes, nicotine pouches, and heated tobacco products (HTPs). If passed, this reform could reshape vaping regulations in Europe, with potential cost increases across all nicotine categories.

These changes are part of a broader plan to modernize how nicotine and tobacco products are taxed and to channel a portion of that revenue into the EU’s long-term budget.

What's in the Proposed Tobacco Excise Directive (TED) Update?

The current Tobacco Excise Directive (TED) last updated in 2011 doesn’t mandate taxes on vapes or nicotine alternatives, as these products were relatively new at the time. Since then, many countries have implemented their own national vape taxes, but there's been no unified approach until now.

Here’s what the European Commission is proposing as mandatory minimum tax rates for each product category:

• Nicotine e-liquid (16–20 mg/mL): 40% of retail price or €0.36/mL

• Nicotine e-liquid (0–15 mg/mL): 20% of retail price or €0.12/mL

• Nicotine pouches: 50% of retail price or €143/kg

• Heated tobacco sticks: 55% of retail price or €108 per 1,000 sticks

Each EU member state could set higher taxes but not go below the proposed minimums.

Why Now? EU Pushes to Regulate Smoke-Free Alternatives

So why is this happening now?

A majority of EU member states have been pushing for tighter regulation and taxation of low-risk nicotine alternatives, citing health concerns and potential youth uptake. European Commission President Ursula von der Leyen responded to this pressure by initiating the proposed revision.

EU Health Commissioner Oliver Varhelyi echoed the sentiment, stating that “new tobacco and nicotine products pose health risks comparable to traditional ones,” suggesting they should be taxed similarly.

At present:

• 21 of 27 EU countries already tax e-cigarettes

• Fewer countries tax nicotine pouches, though this is expected to change under the new directive

• Many already regulate HTPs like IQOS or Glo

This marks a shift toward standardizing smoke-free nicotine taxation across the continent.

Funding the EU Budget Introducing TEDOR

Alongside the excise directive update, the Commission proposed a new revenue stream known as Tobacco Excise Duty Own Resource (TEDOR).

What is TEDOR?

• A proposal to divert 15% of all tobacco and nicotine product tax revenues from member states directly into the EU’s central budget

• Aims to support the bloc’s proposed €2 trillion spending plan for 2028–2034

• Expected to generate €11.2 billion annually, covering ~20% of the EU’s “own resources” goal

This is separate from the TED tax proposal but closely linked in political and financial motivation. Both must pass by unanimous vote in the Council of the EU, where each member country holds veto power.

Member State Reactions – Resistance and Roadblocks

The proposed changes are far from guaranteed.

Countries like Sweden, Italy, and Greece have already raised concerns or outright opposition:

• Sweden, home to Europe’s lowest smoking rates, entered the EU under a snus exemption. It's also the largest producer of nicotine pouches.

• Italy and Greece fear the economic impact on local vape businesses and consumers.

Because EU tax policies require unanimous approval, even a single country can block the proposal.

Conclusion

The EU’s proposed minimum tax on vapes, nicotine pouches, and heated tobacco products marks a turning point in European vaping regulation. If adopted, this policy could dramatically alter nicotine pricing and availability throughout the bloc.

For now, vapers, manufacturers, and public health advocates will be watching closely as the debate unfolds in Brussels.

Stay tuned to Dragon Vape's blog for ongoing updates on international vaping laws, nicotine regulation, and industry insights.

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