This week, the European Parliament rejected both the European Commission’s proposal for new minimum taxes on nicotine products. At the same time, it rejected a report that would, for the first time, have recognised that different nicotine products pose different health risks. The outcome has been welcomed by some consumer organisations – but is also causing concern among advocates of harm reduction.
When the European Parliament convened in Strasbourg to vote on the controversial revision of the Tobacco Excise Directive (TED), the EU’s directive on tobacco and nicotine taxes, the vote ended in an unusual double ‘no’.
First, Parliament’s own compromise report was rejected by 320 votes to 308. Shortly afterwards, the European Commission’s original proposal was also rejected by a wide margin: 439 MEPs voted against, whilst 181 voted in favour.
For many users of e-cigarettes, nicotine pouches and other smoke-free nicotine products, the outcome may be seen as a victory.
– “This is a clear rejection of the Commission’s misguided attempt to impose higher taxes on products that pose a significantly lower risk than cigarettes,” says Michael Landl, head of the consumer organisation World Vapers’ Alliance in a press release.
According to Landl, the vote shows that there is no support for EU-wide minimum taxes on smoke-free nicotine products.
– Taxation should reflect the relative risks and encourage smokers to switch to less harmful alternatives, he says.
The report that divided Parliament
The vote was based on a compromise proposal drawn up by the Czech MEP Tomáš Kubín.
The report comprised two key sections.
The first concerned the tax rates themselves. The proposal involved lower minimum taxes than the European Commission’s original model for several nicotine products, but at the same time introduced new taxes on e-liquids and nicotine pouches.
The second part, however, attracted even more attention.
For the first time in an official EU document, it was established that different nicotine products pose different health risks and should therefore be treated differently in terms of legislation and taxation.
The principle is usually summarised as ”lower risk – lower tax”.
The Road Movement is divided
It was precisely that aspect that meant the vote provoked mixed reactions, even amongst organisations that normally take the same side in the debate.
The Brussels-based writer and harm reduction advocate Peter Beckett believes that Parliament missed a historic opportunity. In a comment ahead of the vote, he described the wording on relative risks as the first of its kind from any EU institution.
”I cannot oppose a report that finally gives me what I have been fighting for for over a decade: official recognition that some nicotine products are extremely harmful, whilst others are not.” writes Beckett in the magazine *Clearing the Air*.
At the same time, he was critical of the tax increases that the report also contained.
This gave rise to an unusual conflict within the harm reduction movement: should they accept higher taxes in order to secure recognition, in principle, of the difference between cigarettes and smoke-free alternatives – or reject the whole package?
An unexpected alliance brought down the report
The report was ultimately rejected after MEPs from several different political groups voted against it for entirely different reasons.
The Social Democrats, the Greens and some members of the Liberal Party opposed the wording on relative risk and harm reduction.
At the same time, French nationalists from the Rassemblement National party chose not to support the report because it still included new taxes on vejp and nicotine products.
The result was that the compromise failed to secure a majority.
It is now up to the Member States to decide
Despite the attention it has attracted, the vote does not mean that the matter has been settled.
Unlike many other EU regulations, tax matters are decided by unanimous agreement among the Member States. In practice, the European Parliament’s role is advisory, and Member States may choose to disregard the Parliament’s recommendations.
Negotiations are therefore now continuing in the Council of Ministers, where the member states are already deeply divided.
The same countries are at loggerheads over the budget
Furthermore, the conflict is reminiscent of the wider power struggle currently taking place over the EU’s long-term budget for the years 2028–2034.
On the one hand, Sweden stands alongside the Netherlands, Austria, Finland and Germany, amongst others. These countries wish to limit EU spending and oppose substantial budget increases.
– ‘Sweden is not an ATM,’ said the Prime Minister Ulf Kristersson to Hallandsposten, during this week’s summit in Brussels.
On the other hand, there are countries such as Spain, Poland, Greece and several Baltic states that would like to see greater joint efforts.
Similar divisions have also become increasingly apparent in the discussions on nicotine taxes. Countries such as Sweden, Greece, Italy and the Czech Republic have previously expressed scepticism towards high, EU-wide taxes on smokeless nicotine products, whilst other Member States would like to see more extensive harmonisation.
For users of e-cigarettes, nicotine pouches and other smoke-free alternatives, this week’s vote therefore means one thing above all else: the battle is far from over.
