Why should I care about Digital Product Passports?


May 8, 2024

Digital Product Passports are coming, but do you need to worry? Here's our guide to whether you should prepare for DPPs.

Imagine your brand being shut out from a market of over 400 million potential consumers. Sounds like every marketing or sales leader’s worst nightmare. However, it could soon become a harsh reality for businesses that overlook the European Union’s (EU) forthcoming Digital Product Passport (DPP) regulation.  

Designed to promote transparency and traceability in supply chains, the incoming DPP legislation looks set to revolutionize supply chains, not just in Europe but across the world. Indeed, without DPP compliance for every product, brands and manufacturers will be locked out of the lucrative European market regardless of where they are headquartered. So, is the Digital Product Passport something you need to prepare for? Let’s take a closer look. 

> What is the Digital Product Passport?
> Why are DPPs being introduced?
> How will DPPs work?
> I’m based in Europe, should I care about DPPs?
> I’m based in North America, should I care about DPPs? 
> How can I get ahead of the game with DPPs? 

Are you ready for Digital Product Passports?

Find out with the complete inriver guide to DPPs.

What is the Digital Product Passport? 

The DPP is a forthcoming EU regulation that aims to promote supply chain transparency and traceability for products across a wide range of industries and verticals. The passports themselves will take the form of a digital record containing key information on a product’s origin, composition, recyclability, and much more. This digital record will then be attached to a product through a QR code or comparable technology.  

The idea is that consumers and other stakeholders will be able to scan a code on the product and access a wealth of product information. This information can then be used to make more informed decisions on how the product is bought, used, and recycled, with the aim of promoting circularity and sustainability into the life cycle of every product. 

what is a digital product passport?

Why are DPPs being introduced? 

DPPs are part of the European Union’s Circular Economy Action Plan, which was adopted in March 2020 as a key pillar of the European Green Deal. The plan sets out a series of initiatives and measures to make the EU’s economy more sustainable and resilient. 

The exact implementation details of DPPs are still being finalized by the European Commission, but there is a rough roadmap. 2024 is mostly focused on raising awareness and preparing companies for the upcoming regulations. The first mandatory implementation is due in 2026. Batteries (specifically industrial and electric vehicle batteries) will be the first product category legally required to comply with DPPs. Beyond 2026 there will be a phased expansion as additional product categories, like apparel or consumer electronics, are gradually added to the DPP requirement, with specific timelines still under development. 

How will DPPs work? 

The European Commission is still discussing and developing the details of DPPs, but the general concept is that they will be based on existing standards and databases, such as the Ecodesign Directive and the EU Product Database for Energy Labelling (EPREL). They will also use digital technologies, such as QR codes, blockchain, and artificial intelligence (AI), to ensure the reliability and security of the data. 

DPPs will cover different types of products, such as electronics, textiles, furniture, and batteries, and will provide different levels of information depending on the product’s lifecycle stage and the intended user. For example, consumers might access information about the product’s durability, repairability, and recyclability, while manufacturers may access information about the product’s materials, components, and suppliers. 

I’m based in Europe, should I care about DPPs? 

In short, yes. The best time to prepare for DPPs is now, and there are some important areas that companies should pay attention to for a successful implementation: 

Quality and availability of data 

It’s crucial to ensure that the data included in DPPs is accurate, reliable, and current. This might require implementing new verification and validation systems. Data must be accessible across various platforms and systems, calling for the development of interoperability and harmonization standards. 

Data protection  

DPPs can contain sensitive information, including trade secrets, intellectual property rights, and personal data. Companies need to establish robust safeguards and controls to protect this information. Additionally, with the constant threat of cyberattacks and fraud, encryption and authentication technologies will be vital to secure your data. 

Managing cost and complexity  

Implementing DPPs can bring significant costs and complexity, including software development, hardware installation, data management, and compliance. Understanding the varying regulatory frameworks across different countries and regions is essential for companies to mitigate legal uncertainty and administrative burdens. Preparation, planning, and the right technological infrastructure are key to successfully navigating the implementation of digital product passports. 

Warehouse manager with barcode reader and tablet PC.

I’m based in North America, should I care about DPPs? 

Quite probably. If you sell into the European market, or are planning to do so, you’ll need to ensure your products are DPP compliant or risk being locked out of the market. If any supply chain partners are based within Europe, you may also need to be DPP compliant to support your partners’ move towards compliance. Finally, with the DPP the first regulation of its kind, it’s possible it could become a global benchmark for similar traceability-focused regulations. This means that DPP compliance standards could be rolled out across multiple markets under a different name, which would mean US-based companies needing complete oversight of all product-related data from across the supply chain of every single SKU. 

How can I get ahead of the game with DPPs? 

There are several ways businesses can prepare for Digital Product Passports. However, one fundamental aspect brands and manufacturers are considering for DPPs is their tech stack, and whether they have the right software solutions in place to deal with the evolving demands of the DPP and other similar regulations.  

Many are turning to Product Information Management (PIM) software to meet their growing compliance needs. PIM solutions are already widely used by brands, manufacturers, and retailers as a sales and marketing tool to ensure customers have access to rich, accurate, and compelling product information on every channel. 

However, advanced PIM solutions can also play a key role in achieving DPP compliance. That’s because PIM solutions built on fully extensible data models can onboard potentially limitless amounts of product-related data from across the supply chain, consolidating it into a single source of truth that can be managed accordingly to ensure the SKU-level transparency needed to create Digital Product Passports. 

With PIM, companies can: 

inriver: The PIM for forward-thinking companies 

With the inriver PIM at the heart of your tech stack, you can not only ensure you maximize the potential profit of your products at every touchpoint, but also make your first steps towards Digital Product Passport compliance. The inriver PIM, built on a fully extensible data model, offers the ongoing data governance you need to fulfill the evolving demands of the DPP.  

However, the inriver platform offers much more than product data governance. The inriver PIM is the most comprehensive product software on the market. Through integrated AI-powered content creation, API-based product syndication, and digital shelf analytics, you can be sure you’re delivering winning product experiences to every touchpoint.  

want to see the inriver PIM in action?

Schedule a personalized, guided demo with an inriver expert today to see how the inriver PIM can get more value from your product information.

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