Denmark’s EU Presidency has proposed a significant increase in taxes on heated tobacco products, as revealed in a document accessed by EU Reporter.
A last-minute overhaul of the Tobacco Excise Directive (TED) shows the Danish Presidency and the European Commission embracing tax levels aligned with anti-tobacco NGO demands while ignoring repeated concerns raised by member states. Heated tobacco is targeted with a sudden “super tax” that critics say undermines harm-reduction goals and bypasses democratic scrutiny.
A new compromise text on the Tobacco Excise Directive (TED), circulated by the Danish Presidency on 28 November, has ignited alarm across several EU capitals. The revised draft—Council document 16153/25—introduces a steep increase in the minimum tax on heated tobacco, rewrites key product definitions, and pushes the Directive in a direction that critics say reflects NGO advocacy far more than Member State positions.
At the centre of the controversy is a new “super tax” on heated tobacco, raising the minimum rate from the European Commission’s originally proposed €155 per kilogram to €360 per kilogram—more than doubling the baseline—while also imposing a mandatory 55% of retail price minimum. The Presidency simultaneously deletes the previous per-item minimum, reshaping the entire excise structure.
As Bloomberg Law reported, Denmark “raised the rate to €360 per kilogram from €155” to close perceived loopholes. The recent amendments will have a significant impact on certain novel tobacco and nicotine products across Member States. For instance, in Greece, the increase will be €1.70 for a pack of 20 cigarettes; in Italy, it will be an increase of €1.10 per pack of 20; and in Sweden, for nicotine pouches, the increase will be €2.80 per can of 20 units, calculated at a rate of €143 per 1,000 units instead of per kilogram.
However, the scale and timing of the revision have triggered accusations that both the Presidency and the European Commission have lifted tax demands directly from anti-tobacco NGOs, including the high-profile network Smoke-Free Europe, while disregarding multiple requests and warnings from member states.
When examining Smoke-Free Europe’s analysis of the European Union’s Tobacco Excise Directive proposal, we notice significant similarities with the European Commission’s proposals. Notably, at least one of the academics involved in drafting this report has received funding from the European Commission.
NGO tax numbers appear to take precedence over member state evidence
Member states had repeatedly asked for:
- clearer impact assessments,
- proportional tax rises,
- attention to illicit trade risks,
- preservation of price differentials for harm-reduction products,
- and a realistic timetable for implementation.
None of these concerns appear reflected in the Danish-led compromise. Instead, several of the key figures and structural shifts align closely with calls made by NGOs campaigning for rapid tax equalisation across all nicotine products.
Diplomats involved in the Working Party on Tax Questions noted privately that the heated tobacco rate “seems to have been copied directly from NGO recommendations rather than emerging from any Council consensus.”
Dramatic structural changes introduced with minimal consultation
Beyond the heated tobacco “super tax,” the Presidency text includes a series of technical-looking but politically loaded modifications:
• New definition of raw tobacco
The requirement that tobacco be “cured or dried” is removed. All harvested tobacco not part of a living plant becomes taxable, closing potential industry loopholes—but several Member States asked for more clarity and impact data. Council 11.2025
• Waterpipe tobacco reclassified
Article 6 is deleted, and waterpipe tobacco becomes a subcategory of smoking tobacco. This prevents reclassification into a lower-tax category, a long-standing demand of anti-tobacco organisations. Member States had requested more time to study the implications.
• Electronic cigarette taxation tightened
The Presidency maintains high minimums—€0.12/ml for lower-nicotine liquids and €0.36/ml above 15 mg/ml—again closely reflecting NGO positions. Concerns about illicit home-mixing and cross-border shopping were not reflected.
• Nicotine pouches subject to steep future increases
By 2032, Member States must apply at least €143/kg or 50% retail price. Nordic and Baltic countries warned of negative impacts on their harm-reduction strategies, but these objections were overridden.
Across the board, Member State proposals for a slower, evidence-based approach appear absent, while NGO-backed demands for stronger tax harmonisation appear integrated.
Transparency concerns grow as negotiations reach the final stretch
Because TED reform is tax legislation, it requires unanimity in Council, with limited parliamentary oversight. This makes late-stage changes particularly sensitive, as capitals fear being presented with a “take it or leave it” package.
Several diplomats expressed concern that:
- The €360/kg minimum was never included in the Commission’s consultations or impact assessments.
- It does not reflect any compromise proposed in Council discussions.
- It does reflect figures published by anti-tobacco NGO coalitions.
- The Commission and Presidency appear to have prioritised civil-society recommendations over Member State positions.
One official summarised the mood:
“Member States asked for moderation and evidence. Instead, the Commission adopted the highest numbers proposed by NGOs. This is policymaking detached from the Council’s own work.”
A former diplomat noted:
“The proposed TED amendments exacerbate the inequality and lack of trust between the North and South, as well as between the East and West, within the Union. Once again, the interests of Eastern and Southern European countries are being overlooked. It is obvious that policy priorities are uneven inside the EU. The new TED proposal aims to divide Europe and undermine the economies and industries of Eastern and Southern Europe, which have invested heavily in social and economic capital. Furthermore, the Danish presidency and the Commission disregard the rights of consumers and citizens. Imposing high taxes on tobacco, alcohol, sugar, and fossil energy resources is likely to push people toward the black market and populist government alternatives. There is already a significant risk that poorer regions will lose out under the next long-term EU budget. Unequal burden-sharing in migration and asylum policies within the EU is a fact as well. And we also have delays and cuts to subsidies that disproportionately hit ordinary people, while wealthier regions or sectors are less exposed. ”
Implications: a decade-defining shift imposed without consensus
The Tobacco Excise Directive sets the baseline for:
- minimum excise levels across the EU,
- tax structures,
- definitions,
- and inflation-indexed increases every three years.
Therefore, adopting NGO-aligned figures today will shape the entire European nicotine and tobacco market for the next decade or more.
Member states fear the outcome may:
- undermine harm-reduction efforts,
- fuel illicit markets,
- erode national tax sovereignty,
- and impose public-health strategies they do not support.
Whether the Danish Presidency can secure unanimity remains doubtful.
But the process has already exposed a deeper debate:
Who truly shapes EU public-health taxation – the elected governments of the member states, or a network of NGOs whose recommendations now dominate the Commission’s drafting?
