Despite public opposition, the European Commission continues to push for ever more climate targets. A new proposal calls for a 90% emissions cut by 2040, compared to 1990 levels. Apparently, the 2024 European Parliament election results, where green parties suffered heavy losses, were not clear enough for eurocrats. Only six EU member states, representing less than a fifth of the EU population, support the proposal.
The Czech Republic is reportedly “skeptical” about this, and Italy wants the number reduced. Many EU governments are demanding concessions in exchange for support, while only Denmark, Spain, Finland, the Netherlands, Luxembourg, and Slovenia broadly support it. In the Netherlands, one may wonder whether the country’s bureaucracy is simply acting independently of the government after the withdrawal of the Party for Freedom of Geert Wilders from the governing coalition.
In 2023, that coalition also nominated the current Dutch EU Commissioner Wopke Hoekstra, who is responsible for climate policy. Supposedly, they did so in return for the Dutchman obtaining an important portfolio. In practice, he is not exactly following centre-right orthodoxy, despite his past as a business consultant at McKinsey & Company, which would suggest a certain sensitivity to economic reality.
Hoekstra is very keen to stick to the EU’s climate policy. He has said: “A resilient, secure and sustainable Europe depends on ambitious climate policies. That means both cutting emissions and adapting to our already changing climate.” The Dutch Commissioner is thereby only offering a limited number of concessions to critical EU member states.
This policy stance is out of touch with what is happening on the ground in Europe, where the chemical sector, which serves as the bedrock for all other industries, is suffering from disinvestment. A key reason for that is Europe’s structurally high energy prices, exacerbated by EU climate policy. The cost of the EU’s Emissions Trading System (ETS), effectively a carbon tax, now exceeds the price of natural gas in the United States.
Jim Ratcliffe, the founder of chemicals giant Ineos, just revealed that he would no longer choose Antwerp to build the new ethane cracker of Project One, a billion-dollar project by Ineos and one of the most important investments in Europe’s chemical sector in decades. He said: “Half of the industry here will be gone within ten years”, also explaining the damage the EU’s ETS climate taxation is doing, adding: “While China is industrializing at an unprecedented pace and the United States has followed suit with tariffs, Europe is mainly de-industrializing. Energy costs are several times higher, and the cash here has to go mainly to carbon taxes instead of investments. That is how life is being squeezed out of our industry.”
Despite this, not a single important European politician has called for scrapping the EU’s ETS climate taxation scheme. Instead, ETS is being expanded to road transport and buildings, something that will cause the annual energy bill for families to rise by hundreds of euros. This is simply revolting.
Higher taxes
The Commission in general and Wopke Hoekstra in particular seem to have abandoned any economic sense. According to German newspaper Bild, the European Commission is considering higher taxes that would make cigarettes at least 20% more expensive, through the revision of the Tobacco Excise Tax Directive (TED). Hoekstra is the responsible Commissioner for this. It is one thing that he wants to make cigarettes more expensive, even if that may fuel smuggling and hurt purchasing power. From the perspective of public health, it is simply alarming that he also wants to hike taxes on alternatives to cigarettes, like vaping products, heated tobacco, and nicotine pouches.
At a European Parliament hearing on 6 February, Hoekstra declared outright that “smoking kills, vaping kills”. That is simply false. According to the UK government’s health department, “best estimates show e-cigarettes are 95% less harmful to your health than normal cigarettes.”
Furthermore, it is rich for the European Commission to pontificate about the damage tobacco does to public health. Sweden is the only EU member state that has not been legally forced by the EU to outlaw an alternative to cigarettes, snus. At the time, Swedish diplomats negotiated this exemption, as otherwise, the referendum for Sweden to join the EU in the 1990s would likely not have passed.
Three decades later, the results are in; and they are damning for the EU’s punitive approach. Not only does Sweden have among the lowest smoking rates in Europe, it also has a much lower incidence of smoking-related diseases. In the 1960s, almost half of Swedish men smoked. Today, only around 5% of Swedish adults smoke, while the European average is 24%. Compared to other EU countries, Sweden has 44% fewer tobacco-related deaths, 41% lower lung cancer rates, and 38% fewer cancer deaths. Notably, Sweden also imposes lower taxes on alternatives to cigarettes.
Of course, correlation and causation are not always that simple, and maybe there are other reasons for Sweden’s success, but at the very least, the European Commission should give the “harm reduction” approach–allowing less or non-damaging alternatives to damaging products–a chance. Instead, we get a tiring, paternalistic, and unscientific approach from those in the EU regulatory machine.
More sensible EU Member states
Thankfully, Italy’s Deputy Prime Minister Antonio Tajani sent a letter to Hoekstra, arguing that when it comes to tax, alternative tobacco products should not be treated the same way as traditional cigarettes. It is not the first time that EU member state governments, which are closer to public opinion than eurocrats, have brought some common sense into the policy-making debate.
One diplomat who represents a Southern member state also pointed out that high tobacco taxation in France and the Netherlands resulted in black markets and increased cross-border shopping, accusing the Netherlands and France of now pushing others to “repeat the same mistake”. Interestingly, Wopke Hoekstra himself was part of the Dutch government that banned all nicotine pouches, even when these did not contain any tobacco at all, a prohibition that followed years of excise tax increases on traditional cigarettes. This policy approach encouraged Dutch consumers to buy cheap, unregulated alternatives. Between 2020 and 2024, the consumption of untaxed cigarettes in the Netherlands increased from 15% to 25%, making the fight against organized crime even more difficult. It also seemed to have helped crime groups in other parts of their shady business. A new OECD study shows that between 2020 and 2021, the Netherlands was the EU’s largest destination for counterfeit goods, ranging from watches and handbags to pharmaceuticals.
In sum, instead of learning from successful policy approaches like the Swedish one, the European Commission wants to do the opposite and copy failed Franco-Dutch policies.
“Simplification” is not enough
To be fair, the European Commission has started with what it calls regulatory “simplification.” It has already announced nine simplification packages since the 2024 European Parliament elections. Four have already been presented, with the rest expected this year. That is of course far from enough. What we need is real deregulation, not just simplification.
The European Commission has previously conceded that its regulatory machine is out of control: for example, when it launched its so-called “better regulation” agenda in 2014. Interestingly, Dutch EU Commissioner Frans Timmermans, later known for his climate zealotry, was the driver behind this agenda. He then proposed that “sunset clauses” be added to regulation—clauses foreseeing an automatic ending date for a certain regulation, organizing reviews to cut EU red tape, and incentivising member states not to “gold plate,” that is, imposing excessive national requirements.
Nothing much came out of this, apart from perhaps a temporary drop in the pace of new EU lawmaking. The EU Commission does subject its regulations to “regulatory impact assessments,” but according to an analysis by think tank ECIPE, “indirect and long-term costs are often neglected, marginalised or entirely ignored” during this exercise.
Before trying to fix the damage, the EU Commission should stop making it worse. It should stop coming up with all kinds of new regulatory packages or proposals for even higher taxes. First shut off the tap. Otherwise, there’s no point draining.
EU Climate Plan: More Taxes, Fewer Jobs, No Debate
Photo by Pixabay
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Despite public opposition, the European Commission continues to push for ever more climate targets. A new proposal calls for a 90% emissions cut by 2040, compared to 1990 levels. Apparently, the 2024 European Parliament election results, where green parties suffered heavy losses, were not clear enough for eurocrats. Only six EU member states, representing less than a fifth of the EU population, support the proposal.
The Czech Republic is reportedly “skeptical” about this, and Italy wants the number reduced. Many EU governments are demanding concessions in exchange for support, while only Denmark, Spain, Finland, the Netherlands, Luxembourg, and Slovenia broadly support it. In the Netherlands, one may wonder whether the country’s bureaucracy is simply acting independently of the government after the withdrawal of the Party for Freedom of Geert Wilders from the governing coalition.
In 2023, that coalition also nominated the current Dutch EU Commissioner Wopke Hoekstra, who is responsible for climate policy. Supposedly, they did so in return for the Dutchman obtaining an important portfolio. In practice, he is not exactly following centre-right orthodoxy, despite his past as a business consultant at McKinsey & Company, which would suggest a certain sensitivity to economic reality.
Hoekstra is very keen to stick to the EU’s climate policy. He has said: “A resilient, secure and sustainable Europe depends on ambitious climate policies. That means both cutting emissions and adapting to our already changing climate.” The Dutch Commissioner is thereby only offering a limited number of concessions to critical EU member states.
This policy stance is out of touch with what is happening on the ground in Europe, where the chemical sector, which serves as the bedrock for all other industries, is suffering from disinvestment. A key reason for that is Europe’s structurally high energy prices, exacerbated by EU climate policy. The cost of the EU’s Emissions Trading System (ETS), effectively a carbon tax, now exceeds the price of natural gas in the United States.
Jim Ratcliffe, the founder of chemicals giant Ineos, just revealed that he would no longer choose Antwerp to build the new ethane cracker of Project One, a billion-dollar project by Ineos and one of the most important investments in Europe’s chemical sector in decades. He said: “Half of the industry here will be gone within ten years”, also explaining the damage the EU’s ETS climate taxation is doing, adding: “While China is industrializing at an unprecedented pace and the United States has followed suit with tariffs, Europe is mainly de-industrializing. Energy costs are several times higher, and the cash here has to go mainly to carbon taxes instead of investments. That is how life is being squeezed out of our industry.”
Despite this, not a single important European politician has called for scrapping the EU’s ETS climate taxation scheme. Instead, ETS is being expanded to road transport and buildings, something that will cause the annual energy bill for families to rise by hundreds of euros. This is simply revolting.
Higher taxes
The Commission in general and Wopke Hoekstra in particular seem to have abandoned any economic sense. According to German newspaper Bild, the European Commission is considering higher taxes that would make cigarettes at least 20% more expensive, through the revision of the Tobacco Excise Tax Directive (TED). Hoekstra is the responsible Commissioner for this. It is one thing that he wants to make cigarettes more expensive, even if that may fuel smuggling and hurt purchasing power. From the perspective of public health, it is simply alarming that he also wants to hike taxes on alternatives to cigarettes, like vaping products, heated tobacco, and nicotine pouches.
At a European Parliament hearing on 6 February, Hoekstra declared outright that “smoking kills, vaping kills”. That is simply false. According to the UK government’s health department, “best estimates show e-cigarettes are 95% less harmful to your health than normal cigarettes.”
Furthermore, it is rich for the European Commission to pontificate about the damage tobacco does to public health. Sweden is the only EU member state that has not been legally forced by the EU to outlaw an alternative to cigarettes, snus. At the time, Swedish diplomats negotiated this exemption, as otherwise, the referendum for Sweden to join the EU in the 1990s would likely not have passed.
Three decades later, the results are in; and they are damning for the EU’s punitive approach. Not only does Sweden have among the lowest smoking rates in Europe, it also has a much lower incidence of smoking-related diseases. In the 1960s, almost half of Swedish men smoked. Today, only around 5% of Swedish adults smoke, while the European average is 24%. Compared to other EU countries, Sweden has 44% fewer tobacco-related deaths, 41% lower lung cancer rates, and 38% fewer cancer deaths. Notably, Sweden also imposes lower taxes on alternatives to cigarettes.
Of course, correlation and causation are not always that simple, and maybe there are other reasons for Sweden’s success, but at the very least, the European Commission should give the “harm reduction” approach–allowing less or non-damaging alternatives to damaging products–a chance. Instead, we get a tiring, paternalistic, and unscientific approach from those in the EU regulatory machine.
More sensible EU Member states
Thankfully, Italy’s Deputy Prime Minister Antonio Tajani sent a letter to Hoekstra, arguing that when it comes to tax, alternative tobacco products should not be treated the same way as traditional cigarettes. It is not the first time that EU member state governments, which are closer to public opinion than eurocrats, have brought some common sense into the policy-making debate.
One diplomat who represents a Southern member state also pointed out that high tobacco taxation in France and the Netherlands resulted in black markets and increased cross-border shopping, accusing the Netherlands and France of now pushing others to “repeat the same mistake”. Interestingly, Wopke Hoekstra himself was part of the Dutch government that banned all nicotine pouches, even when these did not contain any tobacco at all, a prohibition that followed years of excise tax increases on traditional cigarettes. This policy approach encouraged Dutch consumers to buy cheap, unregulated alternatives. Between 2020 and 2024, the consumption of untaxed cigarettes in the Netherlands increased from 15% to 25%, making the fight against organized crime even more difficult. It also seemed to have helped crime groups in other parts of their shady business. A new OECD study shows that between 2020 and 2021, the Netherlands was the EU’s largest destination for counterfeit goods, ranging from watches and handbags to pharmaceuticals.
In sum, instead of learning from successful policy approaches like the Swedish one, the European Commission wants to do the opposite and copy failed Franco-Dutch policies.
“Simplification” is not enough
To be fair, the European Commission has started with what it calls regulatory “simplification.” It has already announced nine simplification packages since the 2024 European Parliament elections. Four have already been presented, with the rest expected this year. That is of course far from enough. What we need is real deregulation, not just simplification.
The European Commission has previously conceded that its regulatory machine is out of control: for example, when it launched its so-called “better regulation” agenda in 2014. Interestingly, Dutch EU Commissioner Frans Timmermans, later known for his climate zealotry, was the driver behind this agenda. He then proposed that “sunset clauses” be added to regulation—clauses foreseeing an automatic ending date for a certain regulation, organizing reviews to cut EU red tape, and incentivising member states not to “gold plate,” that is, imposing excessive national requirements.
Nothing much came out of this, apart from perhaps a temporary drop in the pace of new EU lawmaking. The EU Commission does subject its regulations to “regulatory impact assessments,” but according to an analysis by think tank ECIPE, “indirect and long-term costs are often neglected, marginalised or entirely ignored” during this exercise.
Before trying to fix the damage, the EU Commission should stop making it worse. It should stop coming up with all kinds of new regulatory packages or proposals for even higher taxes. First shut off the tap. Otherwise, there’s no point draining.
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