Disposables and youth vaping are likely to be the major themes shaping developments in the e-cigarette world over the coming year.
Concerns about both are likely to affect debates on matters such as vaping taxes, flavour bans and environmental measures that are expected to take place throughout numerous important jurisdictions.
For example in Europe, the Tobacco Excise Directive (TED) negotiations will dominate the year in the EU. Meanwhile the Tobacco Products Directive (TPD) revision may start getting some shape that will in turn likely influence other countries and their legislation. Increased importance placed on waste mitigation measures will lead to regulations on single-use components such as plastics and batteries, rules that are almost certain to affect disposable e-cigarettes.
All e-liquids, with or without nicotine, are likely to be addressed in the TED. EU customs legislation is also on the table, potentially affecting imports and exports.
A proposal for the TPD revision is not likely to be presented until 2024, but debate throughout much of the coming year will determine the shape of it. One key element is whether a ban on flavours will be proposed.
The European Parliament and Council are expected to consider the Commission’s proposal to revise the Packaging and Packaging Waste Directive, put forward at the end of November 2022. The revision aims to prevent the generation of packaging waste, reduce it in quantity, and ensure that all packaging is recyclable as well as to increase the use of recycled plastics in packaging. The new rules may affect the packaging of vaping products.
Similarly a new Battery Regulation is expected in 2023 that will regulate the whole life cycle of batteries, from design to disposal.
It would cover a wide range of batteries, including industrial and portable ones, potentially affecting batteries in vaping devices. It remains unclear for now exactly what types of portable batteries will be covered, as the regulation would provide only a general framework. Details will come through secondary EU legislation, such as delegated and implementing acts. It is expected that around 32 such acts will eventually complement the Battery Regulation, extending uncertainty over a longer timeframe.
Tax and tax again
At a national level, youth vaping and environmental concerns are again being repeated as drivers of initiatives such as new taxes, flavour bans and packaging rules, as well as advertising limitations and other measures to regulate domestic vaping markets.
A number of countries are expected to implement e-cig taxes during the coming year or have already set taxes that will come into effect in 2023. These include:
- Bulgaria, where excise duty (from March) and tax stamps (from December) are expected to be applied to nicotine-containing e-cigarettes, making them tobacco products for tax purposes, which also brings in other restrictions.
- Estonia, where the finance minister refused to extend the two-year suspension of excise duty on e-liquids, which was therefore reintroduced on 1st January, in the face of industry opposition.
- Kuwait, where the twice-delayed adoption of the 100% customs duty imposed by the Gulf Cooperation Council on e-cigarettes and e-liquids was expected to be implemented on 1st January but has now been indefinitely delayed.
- Saudi Arabia, where the National Committee for Tobacco Control plans to increase the excise tax on all tobacco products to 150% at some point in 2023 in an attempt to limit the number of users.
- South Africa, where the Taxation Laws Amendment Bill, placing a flat excise duty on both nicotine and non-nicotine vaping products, is expected to be signed into law early in 2023.
- Switzerland, where the Federal Council has approved an amendment to the Federal Law on Tobacco Taxation, taxing e-liquids at a rate that takes into account the lesser harmfulness of e-cigarettes relative to combustible tobacco (though with an increase for disposable products).
- The US, where ECigIntelligence believes there is likely to be another attempt to impose a nicotine tax at federal level.
Markets will also start to see the impact of taxation policies implemented in 2022. For example, China is expected to see a contraction of its domestic market because of the higher regulatory burden – including product standards, licensing and a tax – that was imposed in 2022.
However, a couple of jurisdictions will buck the trend and maintain the status quo or even roll back taxes on vaping products. This includes Spain, where an excise duty on e-liquids has been planned but will probably not happen before elections in December 2023; and Italy, where ECigIntelligence believes it is likely a 2023 Budget Bill blocking the planned increase in e-cigarette excise duty for 2023 will be approved.
Flavour bans
Expect a continuation in 2023 of moves against flavours, with more restrictions being imposed throughout the year.
For example, more US states may look to bring in flavour bans, while in the Netherlands a ban on flavours for e-liquids came in on 1st January despite many details still remaining up in the air.
Latvia is in the process of adopting a bill that would ban flavoured e-liquids and e-cigarettes. It is expected to have its third and final reading in the next few months, and could be passed by the end of the first quarter of the year, given its popular support.
Neighbouring Estonia, however, is looking to move the other way with its Tobacco Act Amendment Act 654 SE currently under discussion. If passed, it would reverse a total ban on flavoured vaping products and continue to prohibit only those with “sweet”, “soft drink” or “confectionery” flavours.
Expect youth uptake and environmental concerns also to impact on advertising and packaging regulation in 2023. This includes Finland, and Costa Rica, where standard packaging for e-cigarettes and refill containers is to be introduced.
Ad bans
Advertising bans affecting vaping products will likely come into effect in Belgium, following the expected adoption of the 2022-2028 Strategy for a Tobacco-Free Generation. The strategy will also ban vending machines, place tighter restrictions on long-distance sales and “improve health promotion policies”.
Further into the future, a draft bill to amend the Tobacco Products Act is likely to be sent to the Swiss Parliament in the first half of 2023 following referendums in 2022. The bill would include bans on advertising in newspapers, at open-air events and online.
Estonia’s Tobacco Amendment Act is again set to buck the trend, possibly repealing the existing ban on displaying vaping devices at the point-of-sale and the ban on domestic long-distance sales.
The general rule
Several jurisdictions plan to bring in more general vaping regulations. This includes the Eurasian Economic Union (EAEU), comprising Russia, Armenia, Belarus, Kazakhstan and Kyrgyzstan, where common technical regulations for nicotine products will come into force after a delay; Chile; South Africa, Ukraine – where TPD-like provisions are expected to come into force on 11th June – and Vietnam.
Others are considering nicotine more generally. This includes Malaysia, where a bill to ban the sale and use of vaping products is likely to create heated debate. ECigIntelligence expects initial movement, given that the minister of health is supportive, but eventual limbo as vaping remains popular in the country and a full ban is considered controversial.
In France it will not be a full ban but – driven by environmental and youth uptake motivators – Bill 464 will look to ban disposable e-cigarettes from the domestic market. ECigIntelligence expects this to be a central topic for French politics in 2023.
The UK’s long-awaited Tobacco Control Plan is expected to be published in 2023 but ECigIntelligence believes it will contain little or no provisions affecting vaping, with the UK government preferring to leave the market as it is. Applications for medically licensed e-cigarettes are expected in 2023, however.
In the US, further marketing denial orders (MDOs) are expected to continue to severely limit the legal vaping market – though further court action pushing back against that is also on the cards.
By contrast, Norway is expected to lift the ban on nicotine-containing vapour products, while the Czech Republic is expected to further embrace harm reduction principles, which may have a positive impact on alternative products.
In Peru a bill regulating e-cigarettes for the first time was expected to pass, placing restrictions on sales, imports, advertising and usage. However, the political situation in the country is now in turmoil after president Pedro Castillo – whose party, Peru Libre, put forward the proposal – was ousted from office in December and is now in detention.
Stubbing out smoking?
And then there are the countries moving to end cigarette smoking entirely. Finland’s Ministry of Social Affairs and Health working group, which is considering how it can limit tobacco and nicotine use to less than 5% of the adult population by 2030, is set to conclude its deliberations this month. Proposals for legislative amendments and other measures that support and promote the end of tobacco and nicotine use are expected in 2023.
There is also a small chance the UK Tobacco Control Plan will contain measures such as a gradually rising age limit in order to create a future tobacco-free generation.
This would follow the example of New Zealand, where the Smokefree Environments and Regulated Products (Smoked Tobacco) Amendment Act, passed in December, will ban the sale of smokable tobacco products to anyone born on or after 1st January 2009 – but not e-cigarettes or some other tobacco alternatives.
Perhaps this will inspire other countries to pursue similar plans – which have been on and off in Malaysia as the political pendulum swings, and may now be back on again. What is certain is that we will see plenty of regulatory action throughout the year stemming from the widespread worries about youth uptake of vaping, along with ever more urgent environmental concerns.
Antonia di Lorenzo – ECigIntelligence – 2023-01-03.
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