On 30 March 2022, The European Commission published a proposal for an Ecodesign for Sustainable Products Regulation as a cornerstone of its approach towards environmentally sustainable and circular products, under the framework of the EU Green Deal. The proposed regulation includes the concept of Digital Product Passports (DPPs). In this article, we explore the definition, purpose, and activation of the EU Digital Product Passport.
What is a Digital Product Passport?
A digital product passport is an information requirement and digital record that contains information about a product’s entire lifecycle, including information like product identifiers, material composition, performance, environmental and social data. The European Commission proposes DPPs as a secure and standardized way of sharing product information across the entire value chain, and that the data can be accessed via physical present identifier like QR code or RFID chip once the DPP has been created at any point upstream or latest when product enters the EU market.
What is the purpose with a DPP?
There are those who believe DPPs to be a potential game changer in the long term, and that the concept could revolutionize the way products are designed, produced, and consumed. By providing both consumers and businesses with dependable and comparable information about a product's environmental and social impact, DPPs can play a crucial role in promoting and accelerating sustainable production and consumption. Moreover, DPPs can facilitate the transition towards a circular economy and business models by enhancing the ability to track and trace the products' lifecycle and ownership. Additionally, DPPs can enable the validation of business and regulatory compliance at scale and assist authorities in conducting better checks and controls.
When can you expect DPPs to be regulated?
The DPP is an evolution of several policy frameworks and although the requirement for the countries of the European Union has not yet been put into effect, it soon could be, thanks to the Ecodesign for Sustainable Product Regulation as a draft proposal in March 2022.
2023 will be key to finalize the requirements and DPP as a regulation could then start applying 2024 and roll out gradually until 2030. With batteries as front runner, followed by the textile industry, construction products and electronic goods etc. There are still high uncertainties in regard to what the requirements and how they will evolve over time.
Several voluntary examples of DPPs already exist that are largely driven by industries or industry organizations. Most of them, how ever are in early development stages and industry-specific rather than broadly applied or required through regulation. One more established example is the Battery Consortium, a group of eleven leading international organizations that published the first publicly available Content Guidance on the EU Battery passport 17 April 2023.
Key challenges, and opportunities for innovation, collaboration and growth
While DPPs are seen to offer several benefits, they also face several challenges. These include concerns surrounding data privacy and confidentiality, regulatory uncertainty, data and technology interoperability, and the cost of implementation. However, these challenges can also create opportunities for innovation and collaboration among stakeholders.
Businesses that embrace DPPs look to take a first-mover advantage and can gain benefits such as better positioning, increased customer loyalty, and the ability to charge a price premium. Governments can also benefit from increased regulatory compliance and the ability to better protect consumers and the environment.
Collaboration between businesses, governments, and consumers is key to creating a more sustainable and transparent economy. By working together, stakeholders can address challenges surrounding DPPs and capitalize on the opportunities they present, promoting a greener, more socially responsible economy for all.
Digital Product Passports have the potential to revolutionize the way products are produced and consumed. By providing information about a product's environmental and social impact, DPPs can support sustainability initiatives, promote circular economy, and drive more informed consumption and production patterns. As businesses and governments continue to prioritize sustainability, DPPs are likely to become an increasingly important tool and enabler for creating a more transparent and sustainable economy.
How should your company prepare for digital product passports?
Resources and additional inspiration
Watch our on-demand webinar where we present a case study of collaborating with leaders in the metallic value chain. We will discuss the process of identifying what data to exchange, the associated business value, and how we approached it as a value chain collaboration initiative. This webinar provides valuable insights and practical examples for businesses looking to prepare for the implementation of DPPs..