The Digital Product Passport: compliance and beyond

Although this article focuses on manufacturing companies, it contains information relevant to many other industries.

The DPP is part of the Ecodesign for Sustainable Products Regulation (ESPR), designed to enhance the circularity, energy performance, and overall environmental sustainability of products in the EU market. This regulation, which came into force on July 18, 2024, aims to help the EU achieve its environmental and climate goals, including doubling the circularity rate of material use and reaching energy efficiency targets by 2030.

For certain product groups, the DPP will become mandatory in the European Union starting in 2027. According to an ESPR webinar hosted by the European Commission on May 22, 2024, the initial product groups affected are:

• Iron and steel
• Aluminum
• Textiles (especially garments and footwear)
• Furniture, including mattresses
• Tyres
• Detergents
• Paints
• Lubricants
• Chemicals
• Energy-related products
• Information and communication technology products and other electronics

The DPP will include data from all phases of the product lifecycle, focusing on the following categories:

What does this mean for manufacturing companies?

Since DPP involves data spanning the entire product lifecycle, it’s necessary to consider the complete value chain. Regardless of your position within that chain, you will need to manage your own data and share or consume data from your value-chain partners.

The following diagram provides a holistic view of the lifecycle steps and the various value-chain partners involved in this context:



Image: DPP Data Operators in the value-chain

In the best-case scenario, you already have all the interfaces to your partners implemented, they provide exactly the data you need, and your data services are mature enough that you only need to connect the dots. Then, you would just orchestrate everything, register your product with the EU Registry Service, and your DPP is ready.

Unfortunately, things are rarely that simple.

You will likely face one or more of the following challenges:

• Your partner is not capable of providing the required information.
• Raw materials delivered do not always have the same consistency, leading to different DPP metrics, at least on a batch level.
• Information needed to meet DPP requirements is not available within your company, or not at the required level.
• You are used to working in a “cradle-to-gate” model, so your enterprise IT architecture is not prepared for “cradle-to-grave”.

To get a quick impression of the complexity level you are facing regarding DPP data, we have developed an evaluation tool. This tool will help you identify the relevant data points and their respective maturity level, providing you guidance for the next steps. The most critical parts will be shown as red flags, to help you identify where to start to ensure you are ready in time.

For establishing an integrated and automated approach, you will need a data platform where you can collect, manage, and exchange DPP data points. Depending on your starting situation, you can integrate your DPP solution into an existing data layer or build a completely new one. The key point is to consider the roll-out phase of your project when making technical decisions. Site-specific application landscapes, different cloud providers, and operational models are significant influencers when looking for a consistent solution architecture.

Opportunities instead of burdens

Regulations requiring investment in an IT project that may not have been on your enterprise roadmap are generally unwelcome. However, if you have to do it, you can use it to derive added value for your business.

Here are some potential use cases:

1. Getting Insights into Product Usage
   Staying informed about your product’s usage, even until the end-user stage, can provide valuable insights for future product designs.
   
   
2. Product as a Service (PaaS)
   Rather than selling your product just once, you can offer it as a service, taking care of repairs, upgrades, and exchanges (including end-of-life treatment).
   
   
3. Dynamic Pricing
   CO2 is already a quality metric and, in some cases, even comes with a price tag. Having full transparency regarding the CO2 footprint of different mixtures or combinations of your product opens up numerous possibilities for adjusting your prices according to market demands.

These are just a few examples and may not all fit your company’s current situation. However, increasing the data density regarding your products and processes and exchanging it with partners and stakeholders always brings value to your ecosystem. Structured data is especially vital when implementing AI models to increase efficiencies, prevent errors, or innovate products.

I hope this article provides a brief overview of the challenges related to the DPP, how to approach them, and how the required investments can open new opportunities for your business.

If you need further assistance or want to discuss specific aspects in more detail, please contact me via LinkedIn or at stefan.novoszel@tietoevry.com.