How Companies Should Prepare for Regulations on Digital Product Passports

Governing bodies around the world are pushing for DPP usage as a legal mandate. But when exactly will DPPs be mandatory, and whom will these regulations affect?

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You may have already heard how digital product passports (DPPs) will play a role in a more sustainable future. Companies can leverage this technology to create visibility from end to end in the production process, helping consumers and regulators hold companies accountable for their environmental footprints and labor practices.

Because supply chains tend to be long and complex, consumers often don’t know where their goods originated, what they are made from or who was involved in creating them. DPPs are a way to increase transparency by tracing the item and its components through every step of the supply chain. Moreover, DPPs can help verify sustainability claims and protect companies against greenwashing claims and legal violations. 

Delivering this level of traceability to supply chains also enables a circular economy, a production model that reuses and repurposes materials continuously in a closed loop. This in contrast to our current wasteful open-loop system which is dependent on materials constantly flooding in and out. 

But improving supply chain visibility and adopting circularity are not moral or altruistic imperatives. Governing bodies around the world are pushing for DPP usage as a legal mandate. But when exactly will DPPs be mandatory, and whom will these regulations affect? Let’s take a look.

Understand legal mandates

The EU has already passed several directives dictating the usage of DPPs in its trade bloc, with many more proposals pending. For example, in accordance with the recently enacted EU Battery Regulation, all electric vehicle and industrial batteries sold in the EU from 2026 onwards will be required to have a digital battery passport containing key product information including battery characteristics, performance and durability history and recyclability. Anyone interested can access this information by scanning the QR code on the battery. 

The EU Commission has also formally announced its intention to “introduce a digital product passport for textiles based on mandatory information requirements on circularity and other key environmental aspects.” These requirements for the textiles sector are expected to come into force by around 2030, dictating supply chain visibility for everything from footwear to mattresses. 

There is also a range of other regulations being implemented across other geographic regions, with the goal of creating more sustainable products and industries. Many countries across the EU are implementing various extended producer-responsibility laws (e.g. the German Electrical and Electronic Equipment Act) to increase the accountability of manufacturing companies.

Be proactive 

Even though strict requirements for digital product passports may be years away, especially outside of the EU, there are several reasons to start the process of implementation now.

First, implementing a digital product passport system requires significant effort, time and resources. Companies must ensure that their internal systems and processes are compatible with the new technology, and that their employees are aware of how to use it effectively. By delaying implementation, companies risk falling behind their competitors and losing out on potential business opportunities.

The process can become overwhelming very quickly. In numerous examples, companies announce a digital passport as a proof of concept and then inundated with consumer requests for items with digital passports, which they couldn't fulfill because they hadn’t actually implemented the system yet.

It also takes time to align supply chain partners on common definitions, goals and priorities. Delaying adoption of this technology can result in a significant delay in achieving alignment with suppliers, partners and customers who may have already implemented the technology. This delay can cause a misalignment of priorities, resulting in costly mistakes and disruptions in the supply chain. 

Moreover, getting involved now with DPPs means shaping industry standards. By adopting digital product passports early, companies can help influence the development of future technology and regulations. This proactive approach can lead to a competitive advantage and increased brand recognition.

Staying ahead of the curve

If your company has decided to adopt digital product passports for your supply chain, it can be difficult to know where to start. But the general process should go something like this. As a first step, you should map out regulatory requirements for data transparency. Begin by identifying the regulatory requirements that your company needs to comply with, as well as any additional information that would be useful to track for your specific products. 

Once you have a clear understanding of the information you need, identify any gaps in your current data collection and management processes. Determine what information you need to gather yourselves, what information is located elsewhere in your supply chain and how you can work with your partners to obtain reliable data. Develop a strategy for closing these gaps and ensure that your partners are aware of the requirements.

Then you can identify the requirements for a digital product passport system to meet your needs. There are many digital product passport providers in the market, but not all of them may be suitable for your business. Start by identifying potential providers that meet your requirements and begin vetting and testing them. Ensure that the providers have a reliable track record that’s specific to the field of digital product passports and can provide the necessary support and maintenance for the system.

By following these steps, you can ensure that you are well-prepared to adopt DPPs as your industry shifts in that direction. Remember that this can be a complex process that requires careful planning and collaboration with your supply chain partners. But with the right strategy and system in place, digital product passports can bring not only regulatory compliance but also significant operational and reputational benefits to your company and help you stay ahead – and visible – in a rapidly evolving market.