EPICENTER

The EU’s Carbon Border Adjustment Mechanism (CBAM) is heavily criticised in Brussels Report for raising costs for European manufacturers, especially SMEs, while phasing out free allowances and imposing burdensome reporting requirements. Drawing on Epicenter expertise, the article warns that the selective mechanism distorts supply chains, invites retaliation from trading partners, and disadvantages developing countries – ultimately risking trade wars and undermining international climate efforts rather than strengthening them.

New EPICENTER research covering 28 countries shows a clear statistical link: every €1 tax-driven price increase expands the black-market share by 5–12 percentage points. Countries such as France, the UK, Greece and Ireland have seen illicit trade soar after major tax hikes, while legal sales collapse and smoking prevalence barely budges. The result is lost revenue, stronger criminal networks and thousands of self-employed tobacconists across Europe at risk.

EPICENTER’s latest 28-country analysis confirms that every additional €1 in taxation pushes the illicit cigarette market up by 5–12 percentage points. In nations like France, Ireland, Greece and the UK, sharp excise increases have triggered dramatic rises in smuggling, slashed legal sales and left smoking rates largely unchanged—delivering windfall profits to criminals while endangering the livelihoods of small, self-employed retailers.

A new European study featured in Autónomos y Emprendedor reveals how steep tobacco taxes are driving a boom in cigarette smuggling across 28 countries, eroding public revenues and endangering self-employed tobacconists' livelihoods. EPICENTER analysis shows a statistically significant correlation: every €1 tax-driven price hike boosts the black-market share by 5–12 percentage points. Nations like France, the UK, Greece and Ireland have experienced sharp illicit trade rises after major tax increases, with legal sales plummeting while smoking rates hold steady—shifting consumers to contraband and empowering criminal networks.

A new Financial Times analysis highlights Epicenter’s latest research showing that the total word count of EU legislation has surged over 700% since the Maastricht Treaty. This unchecked regulatory accumulation is presented as a core reason for Europe’s declining competitiveness, driving up compliance costs, slowing decision-making, protecting incumbents and diverting resources from innovation to bureaucracy. The piece underlines how political incentives make meaningful deregulation politically near-impossible.