The EU Digital Product Passport & What it Means for Your Business

Sustainability will have an increased focus in the European Union with the coming implementation of a new Digital Product Passport (DPP) – and product origin is a key component.

The DPP is part of the Ecodesign for Sustainable Products Regulation, which was approved in June 2024. It functions as a digital identity card for products, components, and materials, used for the storing of relevant information to support the sustainability and circularity of products.

While the scope of the Passport initially covers mainly energy-related products, it will then be expanded to include textiles and other sectors.

The introduction of the DPP reflects that the origin of raw materials is once more a cornerstone of major EU legislation. It reinforces that as regulators, consumers and investors increasingly demand and prioritize sustainable products, proven origin verification is essential.

How the DPP Supports Sustainability Legislation

The Ecodesign for Sustainable Products Regulation (ESPR) entered into force in July 2024 as part of a raft of measures intended to support the EU’s environmental and climate goals.

A key aspect of the ESPR is improving the sustainability profile of products placed on the EU market, and the Digital Product Passport is one initiative designed to enable this.

It requires all products placed on the European market to have a machine-readable product passport, such as a QR code, which is linked to a unique product ID. This digital record will store information about a product’s environmental footprint throughout its lifecycle.

In introducing this, the European Commission stated, “Digital Product Passports [are] to be the norm for all products regulated under the ESPR, enabling products to be tagged, identified and linked to data relevant to their circularity and sustainability.”

The objective of this is to enable markets to make more informed decisions related to product sustainability and circularity.

Circular economy graphic (source: BCG)

The information required for collection and storage is still being defined, but is anticipated to include details on:

• The product’s durability, reusability and repairability
• Materials used and their origins
• Percentage of recycled content
• The product’s carbon footprint
• The product’s circularity

This information will be accessible to consumers, manufacturers and regulators through a dedicated web portal. It will enable authorities to perform checks on imported products to validate that Passports exist and that they are both current and authentic.

As a result, the environmental impact of a wide range of products will be considerably more visible and traceable than ever before – and businesses will need to be prepared for that.

How the DPP Relates to Other EU Legislation

The Digital Product Passport is the latest in a series of EU legislation concerned with environmental protection and sustainability. These include:

1. Corporate Sustainability Due Diligence Directive (CSDDD): Requires companies to have greater oversight of environmental and social impacts through their supply chain
2. EU Deforestation Regulation (EUDR): Permits only products from non-degraded or deforested land from being imported into or exported from the EU market
3. EU Forced Labour Ban: Prohibits products made with forced labour from entering or exiting the EU market
4. Directive to combat greenwashing and promote sustainability: Enforces stricter rules around product labelling and prohibits misleading environmental claims

Where the DPP differs is in the scale of coverage. Because there are no restrictions on the type of products, the scope of enforcement is potentially much broader than, for example, the EUDR, which is focused solely on products linked to deforestation concerns.

It means that every product available in the EU via retail shelves or online stores will in time require a unique Passport.

Status & Rollout of the DPP

The Digital Product Passport will be rolled out by industry between 2025-2030. Given the high environmental impact of textile manufacture, the requirements for this industry are expected to be given priority and released in mid-2025.

Specific requirements for the remaining primary product groups are expected to be finalized by 2030.

This timeframe for rollout allows companies time to begin identifying data requirements and assessing any information gaps which could impede DPP compliance – such as environmental impact data or product origin verification.

What the DPP Means for Businesses

The Digital Product Passport requires companies to keep more detailed information about the origin, materials and environmental impact of their products. Failing to do so will risk incurring noncompliance penalties.

The DPP will also have a global impact beyond EU market boundaries, as the European Commission plans to enforce the regulation on imported products, their components and intermediary products, with importers being held responsible for ensuring compliance.

This will significantly impact global value chains, obliging suppliers and producers around the world to collect and report on the required data. Furthermore, the regulation could potentially trigger lawmakers in other geographies to adopt DPPs in the future.

However, the Passports can also be advantageous for companies. The enhanced transparency could help shine a light on supply chain practices that suggest fraud or other irregularities.

It can also enable companies to optimize their processes to deliver more sustainable outputs, which can then be leveraged in promotional activities to bolster the company’s brand and customer reputation.

But acquiring and maintaining the necessary information may pose a challenge initially. Determining what product data can be retrieved from current reports, then identifying and gathering missing data, will require significant time and resourcing.

Given that companies must disclose their environmental footprint, and since one of the highest manufacturing impacts comes from raw materials, it’s therefore important for companies to have robust information on the sourcing or origin of their raw materials.

The Importance of Origin in DPP Data

Without knowledge of product origin, companies will be challenged to adequately complete the requisite product record.

Most European companies have already begun the process of collecting this information and measuring their impact assessment based on raw material origins.

In addition, certain producers in rural sectors are doing likewise, many at the request of customers who need disclosures of CO2 emissions to populate their reporting requirements.

Scientific verification is a tool for origin authentication that offers the highest levels of robustness and accuracy. Through forensic analysis of the elements inherent in all natural products, the origin of products and raw materials can be defined with scientific precision. This includes materials such as cotton and other fibres, coffee, red meat, dairy, horticulture and aquaculture.

Oritain has been a market leader in scientific origin verification for over 15 years. Through our pioneering methodology, we can provide essential data on product origin to support companies in fulfilling their DPP reporting requirements.