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Unlike GDPR some time ago, Digital Product Passports (DPP) will impact Production too. Extensively, even. At least as long as what you produce is destined for the EU-market, either as finished products or as inputs, sooner or later, for products that finally are to be sold in the EU. The DPP regulation will come into force from end of 2027, starting in some industries, for others to be added gradually. Once implemented, it will not be permitted to sell products without a valid DPP in the EU - like trying to sell a car without wheels.
Most people starting to learn about DPP, focus on the initial impact, to get compliant, but we'll also dive inte how DPP is likely to affect production matters in the long term.
Initially - A Mad Scramble for Data on Environmental Impact
Digital Product Passports are about creating easily accessible transparency on circularity and environmental impact by products, "from cradle to grave" (or reuse/recycling). Obviously, the entire production process has a big part to play in that. You will need to find and calculate all sorts of data on how your production impacts the environment.
It's highly unlikely that you have that kind of data at hand since most of it has never been asked for in the past. You will need to work your way dissect your entire production process, in detail, to find out how every detail impacts things like carbon emissions, other emissions, energy consumption, how that energy is consumed and how that impacts the environment.
You'll also need to look into your production and handling of waste. What is it? What happens with it? How does it impact the environment?
Meanwhile, your colleagues in procurement will be busy working with the suppliers of inputs to your production to obtain the same kind of information from them.
In case any of your suppliers claim to hold certificates of environmental performance, socially responsible production etc. you will need to require a possibility to access such certificates at the source, and get continuous validation by the emitter of the certificates. You will need to do the same for any certificates you claim having.
Does that sound like a tall order? Hold my beer and read on, regarding the ways DPP might affect you in the long term.
After Compliance Comes Competing
The DPP regulation is part of the bigger ESPR regulation framework by the EU. ESPR stands for Ecodesign for Sustainable Products Regulation. The name signals the underlying intention of the regulatory package of which DPP is part: the transparency created by DPP is intended to encourage, or force, producers to design products with less impact on our environment.
The transparency on environmental impact brought by DPP will make it possible for anybody to compare and rank similar products on their environmental qualities, just as you can do on price, performance and other criteria.
It might not be that the environmental qualities turns out to be the decisive factor for buyers choosing between the final contestants, but it will sure not be in your favour to be at the bottom of that ranking. It is highly likely that you, over time, will have to modify your manufacturing process to improve the environmental impact. At least to remove "the worst culprits".
Expect a continuous tuning of production processes for environmental reasons, similarly to how you today tune for increased efficiencies, improved methods, new materials or suppliers et cetera.
More To Come Next Week
The long term impact we expect on work in the field of production is quite extensive. Therefore, we have saved the rest for a second blog post next week, 6 November. The areas we'll touch on then are:
Added Reporting Needs
Asset Management
Potential Big Changes for Process Industries
Why not subscribe to our blog to get notified about part 2?
Image by MTStock Studio on iStock
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