Expert Analysis: Digital Product Passports Provide Transparency into Global Supply Chains

Digital Product Passports will revolutionize the way consumers and regulators interact with products on the European market. In this Expert Analysis, Daniela Michaelis, Material Compliance Specialist at 3E, looks at what digital product passports are and how they will contribute to a sustainable economy.

While many people might not have heard of digital product passports (DPP), the European Union (EU) is planning to use them to give consumers and regulators unprecedented insights into the origins of products and product components on the European market.

The new Ecodesign Regulation (ESPR) is set to replace the existing Ecodesign Directive 2009/125/EC. Like the Ecodesign Directive, ESPR serves as a framework to ensure that the new requirements apply directly in all EU member states.

DPPs are a key innovation within ESPR. They will ensure the exchange of information between economic actors along the value chain in line with the sustainability objectives of ESPR, which contributes to the EU's goal of reducing greenhouse gas (GHG) emissions to become the first climate-neutral continent by 2050.

A Closer Look at ESPR

DPPs are integral to ESPR, which will be published in the Official Journal of the EU and will enter into force 20 days after the date of publication. The actual implementation of the different DPP requirements will have varying transition periods depending on the delegated acts, which provide the specific requirements for products or groups of products. While ESPR is a framework for ecodesign requirements, the specific requirements for each product group are written into the delegated acts, which will be published at a later date. In the meantime, the delegated acts issued under the existing Ecodesign Directive will continue to apply.

The EU Commission will gradually issue further delegated acts for additional products and product groups. The Commission will draw up a list of the product groups for which they issue delegated acts as a priority no later than one year after the regulation comes into force.

If we step back to take a wider view, we see that ecodesign requirements are not new to the EU market. Since 2009, the Ecodesign Directive 2009/125/EC has provided a framework for ecodesign requirements for energy-related products. Energy-related products are those that require energy to function, such as refrigerators, appliances, and lamps. Further, many business-to-consumer (B2C) products already provide product information as a result of being registered in the European Product Registry for Energy Labelling (EPREL) database, which is required when products fall under the Energy Labelling Regulation (EU) 2017/1369.

Regulation EU 2017/1369 and Directive 2009/125/EC are complementary legal acts since they both aim, in different ways, to improve the energy efficiency and sustainable impact of products in the EU. Since the EU created EPREL, it has been the only method for generating the energy-efficiency label, which provides a significant amount of information about the energy consumption of each product.

The new Ecodesign Regulation expands not only the requirements but also the scope of products that are subject to it. Table 1 shows an overview of the key differences and similarities between the Ecodesign Directive and the new ESPR that aims to comprehensively promote sustainable product practices in the EU.

Table 1: Comparison of Ecodesign Directive 2019/125/EC and the ESPR

The Digital Product Passport (DPP)

The DPP will feature gradual implementation but will ensure all goods travel through Europe with easily accessible product information. Many consumers are eagerly anticipating having access to the DPP and the critical information it provides.

Product information in the DPP will vary for different stakeholders in the value chain. For example:

• Raw-material producers provide data about production, location, and circumstances.
• Manufacturers provide detail about raw materials and product performance parameters and provide access to product instruction and safe product use.
• The retail sector receives information about the raw material and the product.
• Users receive all the above-mentioned product information.
• Repair shops receive information about repairability and product characteristics.
• Waste management facilities receive information about product material to facilitate recycling and waste treatment.
• While DPP is not a tracking and tracing tool, it facilitates traceability when necessary.
• The more consumers, retail stores, and waste management companies know about products, the better they will be able to handle, use, and treat them.

Similar to the recently adopted Battery Regulation, ESPR requires a DPP for the decentralized processing of product-relevant information. In the future, all shareholders in the value chain will provide standardized, accessible, digital product information. At present, the EU is in the midst of developing a cross-sector definition and description of the specifications for the DPP, defining a cross-sector product-data model, and developing corresponding norms and standards for further development of the DPP.

Article 5 of ESPR establishes ecodesign requirements for the following product aspects:

• Recycled content
• Water use and efficiency
• Resource use and efficiency
• Generation of waste materials
• Environmental footprint
• Energy use and efficiency
• Presence of substances of concern
• Upgradability
• Reusability
• Reliability
• Durability
• Repairability
• Maintenance and refurbishment
• Possibility of recycling
• Possibility of recovery of materials
• Possibility of remanufacturing

Transparency of product data is important not only for consumers but for all players within the value chain. In the future, the DPP will bundle product information - from raw materials to recycling options, declarations of conformity, and operating instructions - and make it transparent and accessible over the entire life cycle. In addition to the product name, producer, properties, and place of manufacture, it can also contain information on environmental and social indicators, such as the carbon footprint or compliance with supply chain laws.

The DPP's impact on the flow of information between market participants is significant, and it therefore makes a decisive contribution to the implementation of the EU Green Deal and digital transformation in the EU, as shown in Table 2.

Table 2: ESPR in the Context of EU Sustainability

With ESPR applying to all products on the EU market, including those produced outside the EU, the DPP is going to have a significant impact on producers around the world. While many of the practical details of the DPP have yet to emerge, it represents a positive step towards creating sustainable products that support a robust circular economy for the EU.

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Editor's Note: 3E is expanding news coverage to provide customers with insights into topics that enable a safer, more sustainable world by protecting people, safeguarding products, and helping businesses grow. Expert Analysis articles, produced by 3E subject matter experts, researchers, and consultants as well as external thought leaders, examine the regulations, trends, and forces impacting the use, manufacture, transport, and export/import of chemicals.