EU Digital Product Passport - Overview
Preparing to comply with EU Digital Product Passport requirements
Over the next several years, upwards of 1.1 million businesses will be subject to EU Digital Product Passport rules, which were launched in 2022 to drive greater transparency around product sustainability. An EU Digital Product Passport is a collection of sustainability data that proves a brand’s sustainability claims to consumers. It can include data points around carbon footprint, materials sourcing, recycling, waste materials, reuse, and disposal.
According to consulting firm McKinsey and Company, 88% of Generation Z consumers don’t trust brand’s environmental claims. EU Digital Product Passports can bridge this trust gap. Because consumers gain greater insight into a product’s sustainability attributes when they use an EU Digital Product Passport, they can develop a greater trust in a company’s actions. For brands, an EU Digital Product Passport helps them comply with upcoming EU laws, as well as avoid greenwashing with their environmental claims.
What is the legislation behind EU Digital Product Passports?
New rules in Europe, launched in 2022, require companies to produce a Digital Product Passport in order to market or distribute their products within the EU. The legislation, called the Ecodesign for Sustainable Products Regulation (ESPR), outlines requirements for EU Digital Product Passports.
It builds upon multiple other pieces of regulation in the EU over the last several years, including the 2009 Ecodesign Directive (which sets energy efficiency and labeling requirements for certain products), the Circular Economy Action Plan (regulations around product design to transition the European Economy from linear to circular), and the European Green Deal (a 2020 policy initiative that outlines a goal of making the EU carbon-neutral by 2050).
Although the EU ESPR regulations outline broadly the requirements for an EU Digital Product Passport, it leaves implementation details to a set of forthcoming industry-specific rules, called “delegated acts”. The EU Commission envisions an additional 30 delegated acts to be released between 2024 and 2030 to provide these specific EU Digital Product Passport rules.
What companies need to create EU Digital Product Passports?
Certain industries are expected to be subject to EU Digital Product Passport requirements, based on their inclusion in the EU Circular Economy Action Plan. These industries have a high potential for circularity, and include:
- Information and communications technology
- Electronics
- Batteries & vehicles
- Textiles / Fashion
- Plastics
- Furniture
- Construction and buildings
- Chemicals
Batteries, for example, have the first industry-specific guidance released for EU Digital Product Passports, the EU Batteries Regulation. It outlines specific data points that battery manufacturers should include in their DPPs, as well as how certain aspects of the DPP should be built.
In contrast, some industries are excluded from EU Digital Product Passport requirements, including:
- Food and feed
- Medicinal products and veterinary medicinal products
- Living plants
- Animals and micro-organisms
- Products of human origin
- Products of plants and animals relating directly to their future reproduction
What does an EU Digital Product Passport look like?
An EU Digital Product Passport is accessed by a “data carrier”, such as a QR code, that links the customer to the product sustainability information. A customer scans the QR code with a smartphone, and can then view the individual data points that a company has provided, such as the origin of raw materials, durability data, care instructions, recycling information, data on resources used in manufacturing (like water and energy), fair labor statements, and the result of third-party audits undertaken.
The EU Digital Product Passport should also be available at no-charge to customers, and companies that help process the DPP data are not able to reuse or resell it. In addition to requirements around security, integrity, and reliability for EU Digital Product Passport data, the regulations stipulate that the DPP data should persist and be available to customers, even if the original manufacturer happens to become insolvent.
The ESPR legislation also envisions that some portions of an EU Digital Product Passport will be publicly available, but other parts will be private, and only available to authorized parties. These private portions of an EU Digital Product Passport may include proprietary product schematics or part numbers that a company would not want publicly available. In addition, companies will also need to evaluate at what level they will need to report on their product sustainability data in an EU Digital Product Passport — including if they need to report data at the product model, manufacturing batch, or individual item level.
What is an example of an EU Digital Product Passport?
We’ve worked with a variety of companies in helping them prepare their EU Digital Product Passports. Although the rules around EU Digital Product Passports are still evolving, many companies already differentiate themselves around sustainability and transparency with their customers, and want to use the emerging EU Digital Product Passport format to connect with their customers.
Tammam, a couture fashion retailer based in London, launched a collection of scarves in collaboration with the European Space Agency. It features prints of well-known landforms from satellite imagery across the globe, like the Amazon rainforest in Brazil, on the fashion accessory scarves.
Because sustainability and responsible manufacturing is central to Tammam’s customer promise, it published an EU Digital Product Passport to show the step-by-step progress its making towards its sustainability goals. Tammam’s DPP shows information about the origin of materials, its ethical manufacturing process, certifications it has received for its products, and additional details about its sustainability philosophy. In addition, it also reports on data from its social impact programs, including a reforestation effort it participates with in India.
Tammam uses an eco-conscious blockchain to store its EU Digital Product Passport data. A blockchain, also known as a public ledger, stores the data in a decentralized fashion across the globe. It is secure, transparent, and immutable. What’s more, the data transactions on a blockchain can be traced, so that any edits or changes can be identified.
EU Digital Product Passports on a blockchain provide a degree of transparency that helps build trust with customers. Alternatively, other companies choose to use cloud-based EU Digital Product Passports, which provide flexibility in editing and a more familiar publishing model.
EU Digital Product Passports as a customer engagement touchpoint
Although many companies focus on the compliance aspect of an EU Digital Product Passport, forward-thinking brands are viewing them as another engagement touchpoint to influence their audience and secure customer loyalty. Using EU Digital Product Passports, brands can attach loyalty rewards that incentivize customers to become repeat customers. Or, companies can include branded content that inspires additional usage occasions for customers.
Learn more about EU Digital Product Passports
Learn more about EU Digital Product Passports in our Digital Product Passport guide. Discover how to implement EU Digital Product Passports for your company by requesting a demo of PicoNext.
