Digital Product Passport: Revolutionizing Transparency and Sustainability in the Circular Economy
The European Union is committed to becoming the first climate-neutral region by 2050. The circular course and several other pieces of legislation have been developed to achieve this goal, including the proposal for a new Ecodesign Regulation for eco-friendly products (ESP). One of the main instruments of this policy is the Digital Product Passport (DPP).
By making all the necessary information available throughout a product’s entire life cycle, the DPP plays a central role in the circular economy, which advocates a paradigm shift and proposes transforming the current linear management system from resource extraction through production and consumption to disposal (take-make-waste) to recycling and reuse of products and components for as long as possible.
Although the ESP and DPP legislation is in its final stages, it is already known that it will apply to all products and ingredients in almost all sectors of activity, except for food, feed, medicine, and motor vehicles, and will affect all market participants in a product in production and distribution in the European Union.
This will create new rights and obligations for those who buy and sell, simplify processes, and ultimately improve the consumer experience. Implementing such a mechanism requires investment from companies, but the GS1 standards system helps to streamline this process. GS1 has come a long way with knowledge gained from many years of experience, and at the same time, multidisciplinary teams are studying the most effective ways to implement DPP.
What is a Digital Product Passport
It is a mechanism for the electronic registration, processing, and exchange of product information between producers, companies, authorities, and consumers.
It provides clear, structured, and accessible data on each product’s characteristics and ingredients, the origin of materials, production methods, and other relevant information.
The DPP aims to simplify digital access to relevant information on specific products in the areas of sustainability, circulation, and compliance with legislation.
It will also allow traceability information to be included where necessary.
Manufacturers must provide some basic information, such as key product data, and additional data, such as CO2 emissions and the presence of substances of high concern.
In the supply chain, other participants can add other types of information until the product is delivered to the end consumer and, at a later stage, accessible to those who repair or recycle. They can also update the data associated with the product passport.
Who is the digital product passport intended for?
Industry
New opportunities, new models, better data management, product optimization, and simplified processes.
Regulators
Enhanced capabilities to verify that companies and products comply with legal requirements.
Consumers
They have access to more information to make more sustainable choices.
Benefits of a digital product passport
Increased productivity
Increases productivity by creating new business models and opportunities.
Accelerates the transition to a digital society
Accelerates the transition to digital technologies and can pave the way for a more equitable society.
Opens new markets for companies
Allows companies to enter the European Union market.
Why is the Digital Product Passport important?
Our lives are becoming increasingly digital as consumers, although we do not stop using physical objects. So, we need to use our dependence on technology to our advantage. A document identifying a product that is immediately available guarantees comfort, safety, and usefulness.
The DPP is designed to simplify and optimize processes along the entire value chain throughout the product’s life cycle. It can last even longer than the product itself, ultimately improving the lives of the people who make, sell, consume, control, repair, and disassemble it.
What does the Digital Product Passport include?
All relevant products and their components sold in the European region must be linked to the DPP. These products are manufactured not only in the EU but also outside it.
This is the responsibility of the market participant, i.e., the company that, after the regulation and sectoral legislation (the so-called delegated acts) enter into force, places a product on the European market for the first time. This applies not only to European companies but also to suppliers from all over the world who export goods to the European market.
The first phase includes textiles and footwear, construction, electric vehicles and industrial batteries, toys and detergents, and metallurgy. It will cover almost all sectors (the only exceptions are medicine, food, and feed). Thus, more than 1 billion products are expected to have a DPP in 2030.
Below is an overview of the European Commission’s planned implementation work, including the list of product groups the Commission should prioritize.
The Commission will adopt the ESPR work plan. Adoption is expected within nine months of the ESPR entering into force (i.e., approximately in Q1-2 2025).
Legislators have previously identified several product groups that the European Commission will prioritize: iron, steel, aluminum, textiles, especially clothing and footwear, furniture including mattresses, tires, detergents, paints, lubricants, chemicals, energy-related products, information and communication technology products and other electronics.
The Commission reserves the right to add or remove product groups from the ESPR work plan, but each decision must be justified.
When will the Digital Product Passport project be implemented?
GS1 has already made great strides in this direction:
- GS1 identifiers such as GTIN are already used by many companies.
- GS1 has over 50 years of experience in standardization to support the industry and help them in their digital transformation.
- GS1 has the know-how and technical background; it knows the industry, the markets, the value chain, and the supply chain.
- GS1 has established a DPP Task Force consisting of members of a multidisciplinary group of GS1 experts, trade associations, and industry representatives. The Task Force is working on this topic and analyzing the most effective way to make GS1 standards fit for the circular economy.
- GS1 is a trusted partner for manufacturers, brand owners, marketplaces, retailers, and consumers who rely on the not-for-profit organization to deliver global solutions that benefit the entire commercial process.
- GS1 identifiers and ISO-compliant media will allow companies to represent data attributes using the same 2D media, eliminating the need to represent different media on the same (and sometimes minor) label. In addition to GS1’s proven ability to support a specific industry in many ways, existing standards have also proven to reduce costs, are quicker and easier to implement, and are familiar to a wide range of industry participants.
Following the European Parliament elections, the core product data requirements will be defined by the European Union.
From 2027 onwards, more detailed industry-specific requirements will be revealed.
By 2030, the legislative process will be completed, and the DPP will be fully operational.
Introducing the DPP is a significant step that will shake up the entire structure of international trade. The European Commission’s proposal for the regulation highlights the importance of introducing open standards that make passports compatible.
Although the regulation has not yet entered into force, companies should start implementing it, as manufacturers already have the opportunity to provide basic information about their products. This will facilitate the transition when it becomes mandatory and give companies a competitive advantage.
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