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In 2027, the European Union plans to roll out regulation requiring products sold in the EU to be supplemented by digital product passports (DPP), information about environmental impact ("from cradle to grave"), circularity, responsible production, repairability, and recycling or responsible disposal.
Although this major regulation is only three years away, the awareness among producers, retailers, and the public is surprisingly low, we dare to look in our crystal ball to how this may bring change to how production and sales of products are likely to change over time. At least in the European Union, but we'd expect it to have repercussions across many other countries, just as GDPR has had.
We see three major phases in combination with a continuous development.
Phase 1: A mad scramble for compliance
Phase 2: Redesign of products, production, and logistics to improve environmental performance
Phase 3: Building additional marketable services on top of the DPP infrastructure
Continued development and supplementation of DPP solutions
Phase 1 – Numbers and data, ANY numbers or data!
Looking at the current state of preparation and the complexity of compiling the data that is needed, many companies will struggle to be able to meet the deadline of "end 2027". The ostrich approach seems to dominate. The task won't go away just because you don't see it with your head in the sand.
Image by Andrey_Kuzmin on iStock
It's not a good idea to wait for specifications and standards to be complete at the end of 2025 (as planned) as that will only leave you two years to do your part. We know enough already to get started.
Actually, we might even split the first phase in two:
First a mad scramble to obtain the data. – Digging through production processes and design specifications. Working with the entire chain of sub-suppliers and their sub-suppliers all the way back to extraction, mining, growing... to be able to obtain complete and reliable data to match the requirements of DPP regulations. This first sub-phase is a matter of being able to obtain numbers and data. ANY numbers and data.
Second, a focus on being able to maintain and provide the data. – Once you have the data, you will need to be able to provide it in formats and units that comply with standards and DPP infrastructure. The job isn't done just because you have the data in a local spreadsheet, that is. It needs to be easily retrieved for presenting to consumers, authorities, and BtB customers at any time, through open systems.
AND the data needs to be maintained and continually re-verified. Suppliers change, methods change, and composition changes. Relying on occasional, manual updates isn't an option. It has to be automatic.
Phase 2 - BETTER numbers and data, under the impact of market forces
The second phase is really the stated purpose by EU legislators for introducing DPP regulations. After all, DPP is part of ESPR, Ecodesign for Sustainable Products Regulation, an initiative to drive a shift to more eco-friendly design of products and production processes.
The idea is, simply, that the easier access to information about ecological impact of products will influence consumer buying behaviour sufficiently for market forces to prompt producers to change designs of products and processes as well as choice of suppliers and transportation methods to safeguard market positions. Simply, if your DPP data is not as good as your competitors, you'll need to improve them to avoid losing sales.
This will be a continuous process of course, an added facet of continued product development. Just like, looks, performance, durability and similar things have been competitive aspects since long, sustainability will be, going forward, in a general way we haven't seen so far.
Phase 3 – Adding value or improving efficiency by using the DPP infrastructure
The third phase we foresee goes beyond sustainability to business development. With the digital infrastructure to provide DPP's, we will have the possibilities to distribute also other kinds of data. Similar to the way we've seen the app-market develop once the concept of app marketplaces was established. For the original producers, of course, but probably also for creative entrepreneurs extracting "slices" of DPP data and packaging them in targeted services.
We see three kinds of services here - currently - but expect the creativity of entrepreneurs to come up with vastly more than this:
Producer/retailer efficiencies – Rationalising existing handling of information and documentation. Why print assembly instructions if you easily can distribute them as instructions, maybe videos, via the DPP platform? (Just imagine how much costs and paper IKEA could save!) Why print service manuals?
Marketable added value services – How about an ownership record that cannot be tampered with? Or an online record of service and authorised installation? An inspirational, living recipe collection to accompany your kitchen appliance, a community for users... As we wrote earlier; creativity is the only limitation.
Targeted services based on DPP data – This is another aspect where creativity is the only limitation. But we'll have a go at some ideas. The first category that comes to our minds is targeted apps like "does this contain non-certified palm oil?" or "Is this gluten-free?" or similar targeted check-up apps. "Is this certified to be free of child or forced labour?" is another one that comes to mind.
We can also imagine ranking apps for product categories. "Rank shampoos by carbon footprint" for example, or "rank smartphones by how much rare-earth metals they contain".
A continuous development of DPP regulations, specifications, and infrastructure
In parallell with these phases,
we can expect DPP regulations,
standards, and specifications to
continue to develop. New aspects of environmental impact to be added, others to be modified.
Maybe adding some kind of instant assessment of sustainability, maybe similar to the labels on energy consumption.
One development we expect is the addition of product authentication to the DPP process. As 5% or more of all products sold in the EU are counterfeit according to EUIPO, using DPP without first having made sure that products are authentic will result in incorrect information being provided for every 20th product, on average. As DPP becomes increasingly established and consumer behaviour develops, we expect consumers not to be satisfied with DPP only being valid 95% of the time or less. They will require to know that the data they read actually applies to the item in front of them.
What do you think will be the future of Digital Product Passports?
Do you have a different projection? In total or just in details?
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