One of the crucial challenges for policymakers is to create a well-structured and balanced policy aimed at both promoting innovation and addressing so- cietal needs. This is particularly relevant for some sectors or goods which pro- duce negative externalities. Here regulation can play a key role in incentivizing manufacturers to develop alternative products and promote better choices for consumers. A regulation differentiating the provisions between different produ- cts could be the recommended approach: positive for better products with the potential to reduce harmful externalities and negative for traditional products causing the externalities. Namely, poor or seemingly outdated regulations could hinder innovation: this may result in fewer investments in R&D and ultimately in the unwillingness to promote better products or more efficient business models.