You probably have heard about the Digital Product Passport (DPP), one of the initiatives of the European Union (EU) to create transparency and unlock a circular economy.
In this article, we will explore the key pillars of the DPP, as well as its relevance and consequences for your company.
What is the Ecodesign for Sustainable Products Regulation (ESPR)?
As part of the efforts towards making Europe the first climate-neutral continent by 2050, several regulations have been put in place to achieve this objective. On 30 March 2022, the EU Commission adopted the ESPR proposal, which is currently close to being endorsed by the EU Council and expected to enter into force in June/July 2024.
The regulation aims to reduce the negative lifecycle environmental impacts of products through efficient digital solutions, meaning more environmentally sustainable and circular products.
In this context, the following initiatives will be key in helping the EU to achieve its climate-neutrality goal:
- promoting a circular economy
- improving recycling
- increasing the lifecycle of products
One of the important initiatives is the introduction of the Digital Product Passport (DPP) for gathering and sharing data on products and their supply chains.
What is the Digital Product Passport (DPP)?
The DPP is one of the critical components of the ESPR and is considered one of the key initiatives that will help reach the targets of the EU.
There is a growing number of EU policies that will rely on the DPP, even though the DPP concept was first introduced in the ESPR. Some of the regulations include:
- Batteries Regulation
- Toys Regulation
- Detergent Regulation
- Construction Products Regulation
- Critical Raw Material Act
WHY:
The objective of the DPP is to simplify digital access to relevant product-specific information in the areas of sustainability, circularity, and legal compliance.
It is not a track & tracing tool, but it will also allow the inclusion of traceability information when appropriate.
The DPP is a vehicle of information (i.e., a digital record) that provides comprehensive information about a product and its value chain. It serves as a tool to create transparency on products, thereby promoting the transition to the circular economy and supporting economic growth.
Furthermore, it should:
- Help consumers and businesses make informed choices when purchasing products
- Facilitate repairs and recycling
- Improve transparency about products’ life cycle impacts on the environment
- Help authorities and law enforcement perform checks and control better
WHAT:
Information to be included in the DPP will be product-group specific, and it will be identified in Delegated Acts.
It may include information/data on one or more of the following areas:
- Technical performance
- Environmental sustainability performance
- Circularity aspects (durability, repairability)
- Legal compliance
- Product-related information (e.g., manuals, other labels)
WHO:
Economic operators (i.e., manufacturers and importers) placing the product on the market will be responsible for the following:
- Making sure that a product passport exists and it is in compliance with essential requirements
- Making sure that the product passport is complete, meaning it includes all the mandatory information listed in the corresponding product group-specific Delegated Act.
- Making sure that the information included in the passport is authentic, reliable, and verified in accordance with requirements established in the corresponding product group-specific Delegated Acts.
- Storing a backup copy of the DPP by a [certified] third-party product passport service provider.
- Making available a copy of the data carrier or unique product identifier to dealers and online marketplaces selling the corresponding product.
Regarding the sectors, it will cover a range of products that need to have their lifetime extended. Therefore, notable exceptions include food, medicinal products, and living plants.
Co-legislators have pre-identified several product groups that the EU Commission should prioritize:
- Iron & steel
- Aluminum
- Textile, notably garments, and footwear
- Furniture, including mattresses
- Tires
- Detergents
- Paints
- Lubricants
- Chemicals
- Energy-related products
- ICT products and other electronics
WHERE:
Products manufactured in the EU and imported to the EU will have to comply with the DPP.
The DPP will affect the 27 countries in the EU: Austria, Belgium, Bulgaria, Croatia, Republic of Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, and Sweden.
Since all products sold and manufactured in the EU will have to comply with those rules, the DPP will have a significant impact globally. It means that all stakeholders in the supply chain must be clear about where and how their products are manufactured.
HOW:
The economic operator placing the product on the market will have an obligation to collect the mandatory DPP information and expose this data in the proper format.
The DPP will have the main design features:
- DPP is based on a decentralized approach to data storage.
- The DPP shall be uniquely linked to a product.
- Access to data will take place through a unique identifier embedded in a data carrier (e.g., QR Code) and relying on a look-up mechanism.
- Access to DPP data is based on a need-to-know basis (there will be public and restricted data).
- Three possible levels of granularity: (i) model, (ii) batch, (iii) item → For each product category, the EU Commission will decide on the level of granularity based on how relevant the product is from a circularity perspective. If repairing and refurbishment are relevant, it is necessary to go at the item level.
Economic operators are responsible for placing the DPP on the market. However, in case they want to outsource some of the steps, DPP-as-a-Service providers are third parties who may assist them in:
- Collecting, assembling, and formatting DPP information
- Issuing the DPP
- Hosting the DPP data
All protocols and standards related to the IT architecture will be standardized and developed horizontally for all product groups and legislations.
WHEN:
The final text of the ESPR is expected to be published in the Official Journal of the EU in June and enter into force in June/July 2024.
Once into force, delegated acts specifying the product-related measures and technical requirements will be drafted.
The first Delegated Acts (textiles, steels) are expected to be adopted in 2026, with 18 months for economic operators to comply with the new requirements. That said, the entry into force of the first Delegated Acts is expected around mid-2027/2028.
Requirements on DPP will have the same entry into force as the corresponding product-specific Delegated Acts, with one notable exception: the DPP for batteries will enter into force in February 2027.
Benefits of the DPP
Enhanced transparency and stronger brand reputation: The DPP provides information on a product’s origin, materials, and environmental impact that enhances transparency and the global visibility of the supply chain. Consumers want to know more than ever about a product’s origin, ethical sourcing, and environmental impact.[1] The DPP then might boost a brand’s reputation and awareness among consumers.
Improved supply chain management: All stakeholders of the supply chain need to have a clear view of where and how products are manufactured. DPP enables economic operators to have more visibility of the supply chain and, therefore, allows the optimization of processes to reduce the impact on the environment and ensure a more sustainable and efficient supply chain.
Increased circularity: As the purpose of the DPP is to extend the lifespan of a product, it will be easier to determine if and how a product or a specific component can be reused, repaired, or replaced. As such, the DPP will help drive circular business models and sustainability initiatives.
What’s next?
It is still uncertain what the DPP system will look like and how it will be implemented. More clarity will come once the first Delegated Acts will be released in 2025.
In the meantime, INEXTO is and will continue to closely monitor and follow the developments of the DPP regulation while working on a solution that will consider both the technical requirements required by law and the needs and specifications of economic operators.
Stay tuned for more information on the EU DPP! Do not hesitate to contact one of our experts to get to know more about the topic and how it will impact your business.
[1] Transparency Is No Longer An Option; It’s A Must (forbes.com)
References
CIRPASS Final Event – CIRPASS (cirpassproject.eu)
Ecodesign for Sustainable Products Regulation – European Commission (europa.eu)