Digital Product Passports (DPP): Know everything about this new EU regulation

In the context of the European Union's efforts for a more sustainable future, the concept of Digital Product Passports (DPPs) has been developed. 

Though still in the developmental stages and nowhere near fully in place, DPPs promise to deeply change how we produce, consume, and recycle products. By embedding detailed information about a product's lifecycle—from materials and manufacturing to end-of-life disposal—DPPs aim to foster a circular economy, reduce waste, and enhance consumer trust.

In this article, we will mention how DPPs will work, what purpose they serve, what their benefits should be, and some detailed information about the current legislation. This article is part of a series of articles about Digital Product Passports, so stay tuned for more!

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What is a Digital Product Passport?

A digital product passport is basically a serial number embedded on a product that links to an online database. This database holds information, including materials, manufacturing processes, supply chain info, origin, and recommended end-of-life disposal. 

It is updated throughout a product’s lifecycle to reflect any changes, maintenance, or recycling actions. Everyone along the distribution chain, all the way to the consumers can then access these data by scanning the DPP and instantly learn everything about the product from cradle to grave. 

However, the concept is still under construction and it will suffer many changes until it comes into law. 

For now, it has a rather fixed purpose and we will do our best to explain it in this blog post. Just like most EU standards, like RGPD, the impact of the DPP will be felt by businesses worldwide, whether they are located in the EU or not, as it will be a necessary step if they want to export within the EU, as well as the way their supply chain operates.

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Why do DPPs exist in the first place?

Many businesses will find the DPP as a burden, an additional constraint on packaging design, or just an extra cost, which are all valid concerns, but the benefits of this concept are real: for the environment and to contribute to bringing about a new era of sustainability and consumer trust. 

More specifically, the benefits of DPP include the following: 

• Environmental Impact: DPP will encourage the efficient use of resources while promoting recycling and reuse. On top of that, because more information will be available on end-of-life procedures, DPPs might indirectly help with waste reductions. 
• Social Benefits: Social benefits are something that must be mentioned as DPPs will provide consumers with information on product safety and the reduction of health risks associated with defective or unsafe products.
  
  The main advantage comes when considering that DPPs will make it mandatory for businesses to provide customers with detailed reports of product stages, manufacturing processes, etc. This can be a way to ensure that products meet ethical standards, such as fair labor practices and sustainable sourcing.‍

• Economic advantages: Sure, DPP will be an additional cost to implement in every supply chain, but in the end, it might actually save money by reducing costs related to product recalls, warranty claims, and regulatory compliance.

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DPP and EU legislation

DPP is closely related and created for the purposes of circularity and product sustainability. The EU wants to make sustainable products the norm and ensure they meet environmental and social standards throughout their entire lifecycle. Their goal is to minimize waste and extend the lifespan.

DPPs were introduced as part of the European Green Deal and the Circular Economy Action Plan. These mandatory requirements for DPPs will be introduced for specific product categories, one after another.

Prioritized by the EU legislative acts are the batteries, textiles, plastics, vehicles, chemicals, packaging and electronics industries. The first required to use DPPs is the battery industry, with the changes taking place between 2026 and 2027. More industries will follow until 2030.

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Importance of Transparency in product manufacturing and consumption

The transparency that’s created due to DPPs, is something that impacts both consumers and manufacturers. 

First of all, it’s a big step towards ethical labor practices.The DPP should include information like materials, origin, environmental impact and manufacturing processes. Allowing customers to make informed decisions about the origins of the products they choose, creating a positive feedback loop encouraging companies to change their unethical practices and strive for the better. 

Thus, transparency is also beneficial for brands because by being open about their practices, they will be able to create a stronger and more stable audience that shares the same values, beliefs, and ambitions.  

It could also make it easier for companies and brands to manage their supply chain. Identifying supply disruptions, quality control problems, or unethical practices will be as simple as possible and the supply chain efficiency will eventually be enhanced. 

Transparency comes with a certain risk, however. It may provide valuable insights and data about a product’s life-cycle but it also raises some serious privacy and security concerns. Businesses will be more vulnerable to data breaches and their sensitive information will be easier to expose. 

A competitor might exploit this information, attempting to gain unauthorized access to the company’s internal systems or even replicate their strategies.

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DPPs data carriers

Data carriers are necessary for DPPs to work for obvious reasons. The EU has allowed businesses to choose their own type of data carrier but the options are, indeed, limited. Which one is the best? Let’s find out: 

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QR codes: Everyone knows what QR codes are and what they are used for. You can find tons of them in the street advertising a new store, a special drink, or a barber discount. It’s the go-to data carrier for all businesses that don’t have important security measures to take into consideration. The drawbacks of this technology are that it is not human-readable and requires a separate device for access.

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NFC: An advantage of NFC tags over QR codes is their ability to be embedded within a product rather than merely attached externally, providing enhanced security benefits. That said, NFC tags are much more expensive to produce and implement in your supply chain, they take longer to read and in some cases, they can be proven hard to locate.

Sure, NFC tags have been proven a good technology for many tasks, but does the same stand for DPPs?

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Data Matrix: A data matrix code is a halfway between a barcode and a QR code. It can encode more data than a barcode (which generally only holds 13 digits), but less than a QR code. On the other hand, it’s more machine-readable than a QR code, as well as more robust: where a data matrix can be damaged or obscured up to 50% of its surface before it becomes unreadable, a QR code only stays readable with up to 30% of its surface hidden.

A barcode is obviously even more robust than that, in most conditions, but the small number of digits it can code makes it incompatible with the needs of the DPP. 

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‍Cypheme tag: Where do Cypheme tags fit into all of this? As per the EU regulations, Cypheme tags can be perfectly used as DPPs. They can encode enough digits to enable the identification of individual products and they are also easily accessible. The main asset of Cypheme tags is the impossibility of duplicating them which, however, is not part of the requirement of the EU. In some cases, this added security layer on top of the DPP can be proven very useful and of course, it's useful by itself as an anti-counterfeit system.

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DPPs and counterfeiting

Are DPPs in danger of being counterfeited? Of course, they are! The fact that they aim to be as transparent as possible doesn’t mean that counterfeiting is out of the game. 

Let’s think of DPPs as normal passports for a minute: Normal passports show your identity, where you come from, where you went. But how can you be sure that the passport itself is real? And that you are who you pretend to be? For that, you need an added layer of security. Something to ensure that the passport cannot be copied or altered. The same thing goes for DPPs. Even if they link to a legitimate and secure database, nothing guarantees that the product they have been printed onto actually is the product it pretends to be.

That’s why an anti-counterfeit system is a good complement to the DPP.

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The Bottom Line

The Digital Product Passport can be a way for businesses and consumers to step into a more sustainable future and help the environment with recycling and circularity. Businesses will face challenges implementing DPPs in their supply chain (link of next article), but they can be tackled with the right strategy and knowledge. Will this new standard hold all of its promises? Only time will tell.