The European Union’s Digital Product Passport: What Suppliers, Brands, and Retailers Need to Know

The European Union’s Digital Product Passport: What Suppliers, Brands, and Retailers Need to Know

Article key points:

• The European Union’s Digital Product Passport (DPP) is part of the Ecodesign for Sustainable Products Regulation (ESPR) and aims to enhance transparency and sustainability in product lifecycles.
• By 2027, many product categories, including textiles, will be required to have a “basic” DPP, which will include product information, lifecycle details, repairability options, and environmental metrics.
• The DPP applies to products sold in the EU, regardless of where they are manufactured, with initial focus on batteries, textiles, and consumer electronics.
• Companies face challenges in DPP compliance, including collecting comprehensive and accurate supply chain data, protecting proprietary information, and making significant technological investments.
• Despite challenges, the DPP can enhance sustainability, build consumer trust, and foster collaboration among supply chain partners, offering long-term competitive advantages.

Introduction to the Digital Product Passport

The European Union’s Digital Product Passport (DPP) requirements are part of the EU’s Ecodesign for Sustainable Products Regulation (ESPR), which itself is part of the EU’s European Green Deal. This new regulation was first introduced in 2022 and began taking effect in 2024, with full implementation expected by 2030. For the DPP specifically, many product categories sold in the EU—including textiles—will be required to have a “basic” DPP attached by 2027.

The EU’s DPP requirements mean that brands and manufacturers will need to collect, analyze, and report on vast amounts of data about every lifecycle stage of every product they create and sell. The goals include: increasing transparency, encouraging responsible manufacturing practices, providing consumers with visibility into the impacts of the products they choose to purchase, and helping companies identify and address environmental and supply chain risks. 

Unlike the EU’s Product Environmental Footprint (PEF), which is a standardized method for measuring and verifying the environmental impact of products across their entire lifecycle, the DPP is a way to communicate each physical product’s impact data in a way that’s transparent and accessible to brands, suppliers, consumers, regulators, recyclers, and any other stakeholders. 

Read on to learn the basics of the DPP and what brands, retailers, suppliers, and consumers need to know about it. 

Key components of the EU’s Digital Product Passport

The DPP is a way to provide everyone across a product’s value chain with access to accurate information about that product’s environmental cost and impact. Its goal is to support a circular economy in which products aren’t merely created, used, and disposed of, but rather, reused, repaired, recycled, or repurposed. 

Transparency into a product’s environmental impact across its entire lifecycle is a key factor in achieving a more circular economy and supply chain, and the DPP is one way to achieve this level of transparency. 

As such, each DPP will include, among other things: 

• Basic product information such as the product name, make, and model
• Product lifecycle information such as the origin of materials and ownership tracking
• Repairability details such as instructions and options for product maintenance and repair
• Environmental metrics such as the product’s carbon footprint and sustainability data

Each product’s DPP will be available digitally through a chip, RFID tag, QR code, or similar label, which is required to be attached to the product and not simply on its packaging. Once fully implemented, consumers will be able to instantly access information about each product’s carbon footprint, even before making the decision to purchase it. 

Which products and companies must comply with EU DPP regulations?

The DPP regulations apply to products sold in the EU market, regardless of where they’re manufactured. This means even products made outside the European Union must comply if they’re sold within the EU. Conversely, products manufactured in the EU but sold exclusively in non-EU markets don’t require a DPP.

While the DPP will eventually apply to many different types of products, the first categories being considered for early implementation (between 2025 and 2027) are batteries, textiles and apparel, and consumer electronics. The EU’s aim is to eventually apply DPP requirements to nearly every type of product, however, the law excludes the categories of food, animal feed, and pharmaceuticals. There may also be some level of exemption or reduced reporting requirements for small businesses, artisanal and craft products, second-hand products that entered the market prior to these regulations, and military equipment.  

DPP compliance challenges: data collection, technology, and implementation barriers

Implementing the DPP can present significant challenges for businesses, particularly for those that are not already in the habit of measuring their carbon impact across their supply chain, or assessing the environmental impact of each specific product. 

For brands, retailers, and manufacturers that aren’t already doing so, one of the most daunting tasks is collecting comprehensive and accurate data throughout complex global supply chains. Companies need to gather reliable information from suppliers at multiple tiers—a challenging prospect where even small inaccuracies could lead to non-compliance. 

Another major challenge is balancing transparency requirements with the protection of proprietary information. Detailed product disclosures might reveal closely-guarded processes or formulations, potentially creating competitive disadvantages. Companies need to disclose sufficient data to meet DPP requirements while safeguarding their competitive advantages and trade secrets. This often means creating secure data-sharing protocols and establishing clear guidelines about what information must be disclosed and what can remain confidential.

The technical aspects of DPP implementation may require significant technological investments. Companies need systems that can:

• Capture, store, and share required product data efficiently
• Integrate with various systems across their supply chains
• Implement consistent digital identifiers (QR codes, RFID tags, etc.) across product lines
• Adapt to evolving EU technical standards as they develop

Despite these challenges, many businesses are finding that DPP implementation offers an opportunity to improve their overall sustainability profile and supply chain management practices, potentially creating long-term competitive advantages like greater supply chain resilience and the ability to do business in more markets around the world by proactively complying with regulations. 

DPP benefits: sustainability advantages and business opportunities for brands, retailers, and suppliers

The DPP represents a significant opportunity for brands, retailers, and suppliers to advance their sustainability efforts in meaningful ways. It also advances other business-critical priorities like increasing supply chain resilience and regulatory compliance. 

The level of visibility into supply chain data that the DPP requires can also foster collaboration among supply chain partners. When everyone from raw material suppliers to manufacturers to retailers can access the same environmental impact data, they can work together more effectively to reduce the overall footprint of their products and make more informed decisions to improve their business. This collaborative approach is essential for meeting the EU’s broader sustainability objectives.

The DPP also serves as a powerful tool for building consumer trust. By providing clear, accessible information about the environmental impact of their products, companies demonstrate their commitment to sustainability and responsible business practices. This transparency can strengthen brand reputation and create stronger connections with environmentally conscious consumers, who increasingly base their purchasing decisions on sustainability factors.

Get ahead of DPP data collection with Worldly

Worldly is the exclusive technology platform of the Higg Index suite of social and environmental assessment tools. Our customers span from global brands and retailers to Tier 1 and Tier 2 manufacturers, and beyond. With Worldly, brands, retailers, and suppliers can track and analyze their supply chain data for business resilience intelligence, regulatory compliance, environmental footprint, human and labor conditions, and more. Learn how you can tap into your supply chain data to prepare for oncoming regulations like the EU Digital Product Passport with Worldly.