January 03, 2024 Industry news
Businesses across the world are recognising the need to improve the sustainability of the products they buy and sell.
At the same time, both governments and consumers alike are demanding greater transparency on the environmental impact of the products they consume.
This is certainly true in Europe where the European Union (EU) has set the ambitious objective of becoming the first climate-neutral region in the world by 2050. To support this ambition, the EU recently reached a provisional political agreement on the so-called Ecodesign Regulation.
The new regulation will replace the existing Ecodesign Directive from 2009 (which was limited to energy-using appliances) and is designed to make products more durable and reliable, easier to reuse, upgrade, repair and recycle – all while using far less resources.
One of the most significant Ecodesign amendments was the introduction of a Digital Product Passport (DPP). Expected to come into effect from 2026, this new legislation will set new standards for how product information is shared among businesses, their consumers, and authorities.
What is the Digital Product Passport?
A DPP is simply a tool for capturing and sharing product data from across the supply chain.
It essentially creates a digital twin of a physical product and securely records event, transactional and sustainability-based data such as information on material sourcing and manufacturing processes.
This digital twin is connected to the physical product itself via a QR code, barcode or other tagging solution to illustrate the product’s sustainable, environmental and recyclability attributes.
Key benefits
By functioning as a kind of digital label, the DPP allows a vast array of reliable sustainability information to be seamlessly shared among all relevant parties.
For businesses, DPPs can provide data-driven insights that can boost efficiencies, support more informed decision making and help reduce a products environmental impact. They also offers platform to showcase sustainability initiatives and circular business models, enhancing consumer trust and building brand loyalty.
DPPs can also be scanned by consumers, providing them with greater transparency about a product's origin, its impact, the materials used, and how it can be reused or recycled.
Current scope
The broader Digital Product Passport concept will evolve over time in terms of utility but, at present, the EU is largely focused on using DPPs to support their sustainability agendas.
The definition applies to any physical good, including components and intermediates products, placed on the EU market or put into service. It includes products manufactured in Europe or exported into the EU, so also has an impact on global trade.
Only a few sectors – such as food, feed and medicinal products – are exempt. In addition, the regulation prohibits the destruction of unsold consumer products, and it sets mandatory green public procurement criteria, within the values and principles advocated by the circular economy.
The overall aim of the proposal is to reduce the life cycle environmental impacts of products through efficient digital solutions but also to enable the objectives of EU industrial policy, like boosting the demand for sustainable goods and supporting sustainable production.
The regulation sets up new duties and rights for manufacturers, importers and distributors, dealers, repairers, remanufacturers, recyclers, maintenance professionals, customers, end-users, consumers, national authorities, public interest organisations, the EU Commission, or any organisation acting on their behalf.
How can businesses prepare?
The provisional agreement still needs to be endorsed and formally adopted by both the European Parliament and the Council before being published in the Official Journal and entering into force 20 days later. Even if the details of many obligations are left to delegated acts and transition periods apply, businesses should begin familiarising themselves with the new provisions to ensured they are prepared.
Businesses will have to ensure they have robust systems in place for efficiently gathering, handling, and sharing the necessary data. This could require investments in adopting new technologies and tools for data management. Furthermore, the increased transparency DPPs demand could expose potentially sensitive information so some organisations may need to ensure their supply chains and relationships with manufacturer are in order.
It may also take time and resources to educate both employees and consumers on how to use and understand DPPs which, if left too late, could delay the full implementation and utilisation of this new resource.
The role of GS1 standards
GS1 supports the introduction of Digital Product Passports and, over the last three years, has been proactively engaging with businesses and policy makers to support the development and implementation of a solution that works for all.
GS1 standards provide the interoperability required to realise the full benefits of DPP, providing a suitable structure for the safe and efficient sharing of information across complex international networks.
EU proposals have indicated that that unique identification for DPPs can be carried out using existing identifiers. Given that the majority of products sold online and in stores already carry a GS1 Global Trade Item Number (GTIN), GTINs are well suited to powering the implementation.
GS1 data carriers such as QR codes powered by GS1 could offer the perfect solution for enabling electronic access to DPP data, allowing stakeholders across the supply chain to easily capture and share product attributes as well as information relating to events and transactions that have occurred throughout the product’s lifecycle.
QR codes powered by GS1 can also be used by consumers, allowing them to instantly access DPP information with just one simple smartphone scan.
