A Practical Guide to the Digital Product Passport

The Concept Behind the Digital Product Passport

What’s driving the need for the DPP and why?

We’re using resources faster than the Earth can replenish them. This demand is expected to increase even more. According to the Global Footprint Network (GFN), humanity is using up natural resources, such as food, water, and land, 1.7 times faster than the planet can regenerate—the equivalent of using the resources of 1.7 Earths.³

Population growth combined with rising consumption means that material use continues to grow by an average of more than 2.3% per year. Material use has increased more than three times over the last 50 years—demand far outstripping the earth’s supply.⁴

To help solve these problems environmentalists, governments, and businesses alike have acknowledged that circularity is now recognized globally as the most promising solution to the planet’s sustainability issues. The planet has reached its expiration date on the current linear—take-make-waste economy.

According to the World Economic Forum, a circular economy is “an industrial system that is restorative or regenerative by intention and design.” It’s all about doing more and better with less—to bring significant benefits to all.⁵

The circular economy is estimated to be worth $4.5 USD trillion globally by 2030. Large consumer goods companies are increasingly recognizing that the development of circular supply chains will reduce manufacturing costs and provide consumers with more sustainable products.⁶

Within the EU, passport technology is becoming mandatory across a diverse range of product categories, starting with batteries, chemicals, construction, electronics, furniture, luxury goods, plastics, textiles, and toys.

Full DPP implementation is currently expected by 2030. This mandate requires companies to digitally document detailed product information across their entire lifecycle. The goal is to promote sustainability and transparency for consumers, businesses, and governments.

From proposal to regulation

In 2020, the European Commission (EC), under the European Green Deal (EGD), endorsed a new Circular Economy Action Plan (CEAP), showing the need for circular economy initiatives to encompass the entirety of a product’s lifecycle—from concept to end-of-life (EOL) stage.

The new plan recognizes the critical role a circular economy plays in mitigating climate change, producing less waste, reducing pressure on natural resources, and empowering consumers to make more informed decisions on product purchases. This approach also aims to create sustainable economic growth, generate jobs, and achieve the EU’s 2050 climate neutrality goal.

During March 2022, the EU introduced the DPP, a mandatory disclosure rule that, as part of the EGD, requires companies to report the recyclability potential of every product they bring to the European market.

The EU reached a provisional agreement on a new regulation, the Ecodesign for Sustainable Products Regulation (ESPR), in December 2023. The ESPR aims to establish sustainable products as the standard in the EU market, while minimizing their overall environmental and climate impact.

The new rules will apply to all products on the EU market, regardless of whether they are produced inside or outside the EU. The regulation includes strict requirements on how companies manage their products. This includes a ban on destroying unsold clothing and footwear, and rules targeted at making products last longer and easier to repair.

Graphics illustrating a Circular Economy

Urban mining is essential for companies transitioning to a circular economy

Urban mining involves extracting valuable materials from waste that would otherwise end up in landfills or incinerators, preserving finite resources. This process avoids the environmental damage and pollution caused by extracting new materials. Additionally, waste from demolition and construction can also be salvaged.

Electronic waste, or e-waste, can originate from mobile phones, flat screen televisions, gaming systems, and tablets to older electronics like VCRs and DVD players. The world produces about 50 million tons of e-waste annually, and only about 20% of this waste is recycled. The United Nations estimates that e-waste could reach 74 million tons by 2030.

Image-Person working on a conveyor for recycling, sorting electronics waste

Scaling up recycling capabilities

While urban mining is not a specific requirement within the DPP framework, the concept of resource efficiency—capturing information about a product’s material composition and potential for recycling from old electronics and e-waste—aligns within the scope of a DPP. In addition, while the core concept of material information is included, the specific details of how urban mining potential is captured in a DPP may vary depending on the regulatory framework and industry standards involved.

Governments can establish regulations that promote recycling over disposing of e-waste. As an example, in 2015, New York City banned the disposal of certain e-waste for curbside trash pickup. The European Union may also consider measures mandating the recycling of critical metals in e-waste including lithium, neodymium, and praseodymium.⁷

By promoting urban mining, the U.S. and other nations can limit their dependence on foreign minerals, reduce carbon output in industrial production, fortify recycling supply chains, and provide economic opportunities in the e-waste management sector.

Data sharing: What organizations, products, and regulations are affected by the DPP?

Because there are many stakeholders and organizations involved in a value chain, each with different data needs and uses, a digital passport solution must be flexible in how it shares and accesses data.

The following entities would be responsible for sharing and collecting required data and information:

Algemene Periodiek Keuring (APK) vehicle inspection in Netherlands
Customers
Customs authorities
Distributors
European Commission
Importers
Manufacturers
Market surveillance authorities
Ministry of Transport (MOT) vehicle inspection in U.K.
Recyclers
Remanufacturers
Repairers
Trade unions

DPPs will affect different regulatory frameworks that include:

Batteries Regulation
Construction products regulation
Critical Raw Materials Act
Detergents regulation
Energy-related products
Information and communication technology (ICT) products and other electronics
The Ecodesign for Sustainable Products Regulation
Toys regulation

What are the benefits of implementing DPPs?

Sections

A Practical Guide to the Digital Product Passport - Introduction

The Concept Behind the Digital Product Passport (DPP)

Understanding DPP Laws, Regulations, and Business Requirements

Industries Affected by the DPP Mandate

What Type of Information Is Stored Inside a DPP?

Blockchain Technology: The Foundation for Building a DPP

Getting Started With DPP

Companies Are Using PLM to Manage DPP Information

PLM Capabilities Used to Manage DPP Compliance

PLM Helps Companies Meet DPP Regulations, Design for Sustainability, and Strategically Transition to a Circular Economy

Addendum/Sources Cited

Building Trust

By providing transparent and verifiable information on a product’s origin, authenticity, and compliance with relevant standards, passports will help to build trust among consumers, customers, investors, and other important stakeholders.

Risk mitigation

Identifies potential and actual risks through information gathering, real-time monitoring, and collaborative data sharing. Passports help companies identify problems with authenticity, compliance, and environmental impact, taking a proactive approach to minimize risk.

Consumer visibility

Consumers will benefit from the passport because of greater transparency about the products they buy, what’s inside, and where they were made. The information also empowers consumers to compare products and make more environmentally conscious choices.

Regulatory compliance

The DPP ensures companies can easily adhere to environmental standards and regulations, fostering a commitment to responsible and sustainable business practices.

Innovation and competitiveness

Passport technology can drive innovation in product design and manufacturing processes by standardizing product information in a digital format. Companies can leverage this data to improve their products and differentiate themselves in a competitive market.

Supply chain sustainability

The passport offers a comprehensive digital record that spans a product’s entire value chain. This enhanced visibility enables companies to optimize processes to reduce environmental impact and ensure a more sustainable and efficient supply chain.