The digital Product Passport is coming!

The Digital Product Passport

As part of the Green Deal, the EU is aiming to transform our current linear economic model into a circular economy by 2050. In our thought leadership paper, we summarized everything you need to know about the introduction of the digital product passport. You will find the key elements of the paper in this blog post.

The digital product passport leads the way for a circular economy

The digital product passport – or DPP for short – is a key element of the European economic strategy and aims to ensure greater transparency along the value chain. The action plan foresees the DPP as a digital twin of a product, enabling the electronic retrieval of product-specific information and sustainability-related details, including origin, material, repair and disposal options as well as recycling at the end of a product’s life.

The exact requirements for the DPP have not yet been determined; the EU wants to define them individually for each sector and product category. The technologies to be used are also not yet specified. However, according to the current EU guidelines, companies should be free to decide which data carriers they use for certain product types, individual products or entire consignments. RFID chips, barcodes and QR codes are conceivable – and in some cases already in use.

The mandatory introduction of the DPP is planned for 2028 and will initially affect batteries for industrial and automotive applications. In the following years, the areas of textiles, chemical products, electrical appliances and ultimately all other areas are to be included and specific guidelines and regulations formulated.

Challenges and opportunities for businesses

Political initiatives often present major challenges for companies – and the digital product passport is no different. Representatives of SMEs in particular fear high bureaucratic costs and additional burdens. In view of the current concept, the industry is also concerned about the disclosure of technological expertise and sensitive company data, which could put European companies at a disadvantage in global competition.

Despite all justified concerns and objections, the digital product passport will come – and both small and large companies can make use of the time remaining until its introduction to invest and set up their product data management accordingly. If the transformation towards the digital product passport era is successful, significant added value can ultimately be derived from the newly gained data availability and transparency in the supply chain. For example, the digital product passport can be used as a single source of truth to open up business models that were previously not feasible due to the data situation. The product passport also creates a new direct channel to the end consumer, which can be used for brand reputation and customer loyalty while creating room for new services.

What steps and tasks are next?

As the digital product passport is still in its infancy and many details still need to be sorted out, it is now up to companies to take their chances, experiment with different technologies and align their value chain with the new challenges and opportunities in line with their stakeholder ecosystem. But where to start?

In principle, the digital product passport only provides added value if it also provides as much information as possible from the individual stages of the product life cycle. For you and your company, this means collecting all product data and adding information to the individual data records as necessary. In addition, a software solution is required in the long term to support you in managing, providing and maintaining the large amount of data. PIM systems were developed precisely for this purpose. They are also equipped with release levels and modifiable validation rules so that data quality – which must, of course, comply with legal requirements in terms of content and format at all times – can be ensured from onboarding to publishing the information.

We are facing huge challenges with the digital product passport that will have a lasting impact on the development of companies and our future. We invite you to take a look at our thought leadership paper, explaining all the important aspects for you – or contact us for a free consultation.

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