• A Digital Product Passport (DPP) is a digital tool that tracks and shares information about a product's lifecycle, from production to disposal, ensuring transparency and sustainability.
• Current and upcoming EU regulations, like the Ecodesign for Sustainable Products Regulation (ESPR), are requiring DPPs to support circular economy goals.
• Capturing verifiable data across your value chain will require a robust, integrated traceability system capable of linking ESG & supply data to your product's chain of custody.

Our current linear consumption patterns are so resource-intensive that they require the equivalent of 1.8 planets annually—an impossible feat on our one and only Earth. These unsustainable practices are responsible for half of global climate change, and they contribute to a staggering 90% of biodiversity loss and water stress. If we don’t shift away from the current make > take > waste paradigm, we risk crossing planetary boundaries, endangering the future of generations to come.

Enter the digital product passport. This innovative tool is designed to propel us towards a circular economy by delivering supply chain transparency, fostering eco-design, and ensuring the second life of materials. But what does a digital product passport look like in the real world? And how can you prepare your value chain for the looming EU regulatory requirements? Keep reading to learn the ins and outs of digital product passports.

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The Digital Product Passport: What It Is And Why It’s Important.

A Digital Product Passport (DPP) is a tool that digitally tracks and shares information about a product throughout its entire lifecycle—from production to disposal. It offers valuable insights into a product’s durability, sustainability, and recyclability, benefiting consumers, regulators, investors, and manufacturers alike. For instance, a t-shirt with a DPP could have a QR code that, when scanned, reveals details about its materials, origin, social and environmental impact, and proper disposal methods.

Primary objectives of the Digital Product Passport include:

• Enhanced Transparency: Consumers can make more responsible purchases by easily accessing product sustainability metrics via machine-readable DPPs (e.g., QR codes or NFC tags), while your brand can confidently eliminate greenwashing.
• Simplified Compliance: By creating an audit trail of social and environmental impact in a product's value chain, the DPP provides your brand and suppliers with the necessary data to address compliance demands efficiently.
• Amplified Circularity: The DPP facilitates a circular economy by promoting eco-design and responsible production of durable products that can be reused, remanufactured, and disposed of correctly.

So, why does the DPP matter for your business? The DPP can help you achieve multiple objectives: it enables you to meet EU due diligence requirements, differentiate your products by engaging consumers, and gain better supply chain visibility to mitigate disruptions and secure your supply.

The European Union (EU) Digital Product Passport

Currently, the EU is the only regulator implementing the DPP at scale, but its regulations have a global impact due to import requirements. As part of the EU’s commitment to make Europe the first climate-neutral continent in the world by 2050, the EU adopted the Circular Economy Action Plan (CEAP). This plan aims to make sustainable products a norm in the EU, focusing on resource-intensive sectors such as electronics and ICT, batteries and vehicles, packaging, plastics, textiles, construction and buildings, food, water, nutrients, and chemicals.

To further the CEAP, the EU has introduced the DPP in a package of policies and schemes, including:

Ecodesign for Sustainable Products Regulation (ESPR)

The Ecodesign for Sustainable Products Regulation (ESPR), effective July 18, 2024, aims to improve product durability, reusability, and transparency in the EU. It replaces the existing Ecodesign Directive, which only covers energy-related products. Key points include: 

Scope: Applies to all companies placing products in the EU market, with priority on textiles (garments & footwear) and metals (iron, steel, aluminum).

Digital Product Passports (DPPs): Required for products, detailing:

• Technical performance
• Material types and origins
• Repairability and recycling capabilities
• Lifecycle environmental impacts

Compliance Timeline:

• July 2024: ESPR officially entered into force‍
• April 2025: Adoption of the first working plan for priority sectors (textiles, metals)‍
• July 2026: Digital Product Passport registry to be established‍
• 2026 Onwards: Prohibition on the destruction of unsold consumer products applies to large enterprises‍
• July 2030: Prohibition applies to medium-sized enterprises

*Note: Concrete product rules will be decided progressively over time, and member states will determine penalties.

EU Strategy for Sustainable and Circular Textiles

Less than 1% of textile waste is transformed into new fibers for clothing. The EU Strategy for Sustainable and Circular Textiles aims to create a more sustainable, circular economy within the textile sector by promoting durability, recyclability, and reduced environmental impact – while addressing social fairness and transparency across the supply chain.

Scope: This strategy impacts textile producers, manufacturers, and retailers who are placing products on the EU market, prioritizing clothing and footwear and household and technical textiles.

Key Areas of Focus: The aim is to take the ‘fashion’ out of ‘fast fashion’: 

• Ecodesign & circularity
• Digital product passports 
• Extended producer responsibility (EPR)
• Microplastics reduction
• Social & environmental responsibility

Compliance Timeline:

• July 2024: ESPR comes into effect, emphasizing eco-design for textiles
• 2025: Reports published in line with the Corporate Sustainability Reporting Directive (CSRD), enhancing transparency in textile production. Member states must implement systems for textile waste management (EPR) January 1, 2025 – in line with the Waste Framework Directive. 
• 2030: Realizing the vision to end fast fashion with durable, recycled products that respect social rights and the environment.

EU Battery Regulation 

As we make the clean energy shift, global demand for batteries is set to rise 14 times by 2030, with the EU accounting for 17% of that demand. The new EU Battery Regulation aims to promote sustainability and transparency across battery value chains from the sourcing of critical raw materials to end-of-life repurposing and recycling.

Scope: This regulation affects all economic operators in the EU battery market, particularly those dealing with LMT batteries, industrial batteries with a capacity above 2 kWh, and EV batteries, excluding SMEs.

Digital Battery Passport: The Digital Battery Passport is a key feature of the regulation, it includes:

• Battery & Manufacturing Information (identification numbers, supplier details)
• Due Diligence & Certifications (responsible sourcing, carbon footprint, symbols)
• Materials & Composition (critical raw materials, hazardous substances)
• Circularity (design information, recycled content, end-of-life treatment)
• Performance & Durability (battery capacity, expected lifetime in cycles)

Compliance Timeline:

• August 17, 2023: Regulation officially entered into force.
• August 18, 2024: Mandatory CE-marking according to regulatory requirements. 
• August 18, 2025: Battery manufacturers and importers with over €40 million turnover must meet supply chain due diligence, producers are responsible for end-of-life treatment; Penalties for violations established by Member States.
• February 18, 2026: Implementation of mandatory carbon footprint requirements for rechargeable industrial batteries. 
• February 18, 2027: Digital battery passport required for rechargeable industrial batteries over 2 kWh and EV batteries. Portable batteries must be removable and replaceable by end users; LMT batteries must be replaceable by independent professionals.

It's important to note that although the DPP is relatively new and has only been introduced in a few regulations, utilizing it can simplify sourcing compliance with other due diligence laws, including the Corporate Sustainability Reporting Directive (CSRD) and the EU Deforestation-free Regulation (EUDR).

How To Create A Digital Product Passport

Although the concept of cradle-to-cradle traceability is not new, the exact requirements for the DPP are still emerging as various use cases adopt the initiative. If your company is proactive and takes the lead, you can take part in shaping the initiative for your industry and guarantee access to the EU market. Overall, the DPP must provide details about a product's entire life cycle, which could include:

Digital Product Passport Data Requirements

Raw Material Sourcing

• Environmental footprint: Proof that commodities don’t contribute to deforestation and biodiversity loss. 
• Carbon sequestration: Data on the carbon reduction initiatives implemented at the source, such as regenerative agriculture.
• Farmer/recycler rights: Verification that the first/last mile workers receive a living income/wage. 

Design

• Durability: Information on processes and materials used to ensure long-lasting products; dismantling and disassembly instructions. 
• Resource efficiency: Quantitative data on operations and materials used to reduce energy and resource consumption.
• Recycled content: The percentage of recycled vs. virgin materials.

Manufacturing

• Waste management: Quantitative data on water usage and waste management in production.
• Carbon footprint: Accurate accounting of the greenhouse gases (scope 1, 2, & 3) emitted during production.
• Chain of custody: Supplier details and maintained chain of custody data, even after mass balance and transformations, tied to identification numbers. 

Distribution

• Transportation: Quantitative data on greenhouse gases emitted during transportation.
• Supplier details: Track supplier and product identification and shipment weights and volumes. 
• Packaging: The environmental footprint of the packaging throughout its lifecycle.

Waste Management/Recycling

• Reuse/repair: Instructions for the consumer/end-user on how to install, use, and repair the product to optimize durability.
• Disposal instructions: Guidance on properly disposing of the product, including disassembly and recycling options.
• Remanufacturing: Reduce remanufacturing uncertainties through comprehensive information on product origin, ownership, and usage.

*Note: This list is non-exhaustive, and the European Commission will provide clarification on DPP requirements for specific product groups overtime. 

‍Pre-Production vs. Production vs. Post-Production DPP

The three different stages of the DPP are:

1. Pre-Production: Visibility of operations at raw material sourcing – from ensuring first/last mile workers were fairly paid to reducing harmful practices that strip the land of its resources – is essential to reporting on your product’s sustainability.
2. Production: Your product will pass through many hands during production. Maintaining the chain of custody, even after mass balance and transformations, is crucial to accurately account for your product’s carbon and environmental footprint (e.g., scope 1, 2, & 3 emissions).
3. Post-Production: Complete circularity requires tracking downstream emissions and sharing comprehensive information on the disposal and recyclability of your product with stakeholders.

Evidence-based traceability of each of these stages is essential to facilitating a circular economy. For example, a DPP incorporating the disposal and recycling instructions for a product must include data on where the materials originated to determine the percentage of recycled content and if the farmers/recyclers were paid a living wage. When you track a product throughout its entire lifecycle, eco-design can be incorporated to increase recyclability. Plus, your supply chains can be optimized to enhance material efficiency, product durability, and sustainability. Although supply chains are complex and vary use case by use case, this strategy holds across industries – from mining and energy to food and beverage to apparel and textiles. 

Digital Product Passport Example

“This transparency enables informed sourcing decisions, mitigates ethical, environmental and compliance risks, and rewards best practices throughout the supply chain.” - Neil Henderson, CEO of ITL Group

So, are DPPs just wishful thinking, or are they achievable in the real world? ITL Group, a leading global provider of innovative apparel labelling products, and BanQu are trailblazing the way and proving the on-the-ground practicality of DPPs. Together, they launched a DPP and traceability solution, leveraging BanQu’s blockchain-based platform to track, authenticate, and provide real-time data on raw materials and social and environmental metrics across supply chains of brands and retailers. The solution is designed to meet growing demands for transparency and sustainability, allowing brands to adhere to regulatory requirements and enhance consumer trust through detailed product information. 

How to Identify the Right Digital Product Passport Traceability Solution

Whether you’re a fashion brand wanting to add a DPP to your sustainable clothing line or a chemicals producer aiming to prove the circularity of your packaging, you will need a reliable, globally versed traceability software. Finding the right traceability solution can feel overwhelming with so many options available. The six criteria below will guide you in narrowing down the right partner to meet your DPP objectives:

Geo-located Proof of Provenance

Why It's Important:
Understanding the precise origin of raw materials is essential for pinpointing high-risk areas and data-backing ethical sourcing practices on your DPP.

How BanQu Helps:
BanQu’s platform uses blockchain to capture and store geo-located data, linking raw materials to specific coordinates. This ensures that materials like cotton or coffee are sourced from verified, sustainable locations (e.g., no deforestation). By providing immutable proof of provenance, BanQu helps brands verify and showcase on their DPP that no harmful or unethical practices were involved. 

ESG & Chain of Custody Data

Why It's Important:
Maintaining a transparent chain of custody – tied to detailed ESG data at each tier – is vital for demonstrating compliance with due diligence standards throughout a product's lifecycle.

How BanQu Helps:
BanQu offers end-to-end traceability, capturing detailed chain of custody data from source to shelf. The platform tracks all supply chain tiers, including ESG data like Scope 3 emissions, ensuring complete visibility and accountability. By maintaining an unbroken, verifiable record of each transaction, transformation, and transportation, your company can easily access supplier details to construct a DPP in line with set criteria. 

Real-time, Configurable Reports

Why It's Important:
Real-time data is crucial for making informed decisions and maintaining up-to-date product information that can be verified by auditors.

How BanQu Helps:
BanQu enables real-time tracking of materials and products as they move through the supply chain. The platform's configurable reporting tools allow brands to generate up-to-date, customizable reports that reflect their business objectives. This functionality is essential for staying compliant with evolving DPP regulations, responding swiftly to supply chain disruptions, and maintaining transparency with consumers and investors. Bonus: BanQu can help you with get the data you need to comply with multiple EU regulations at once.

System Interoperability

Why It's Important:
For a DPP to be effective and comprehensive, your traceability software must integrate seamlessly with your existing supply chain systems and workflows, ensuring smooth operations and data consistency.

How BanQu Helps:
BanQu’s platform is designed for seamless integration with existing ERP, inventory management, and other legacy systems. This ensures that all sustainability and compliance data flows smoothly across different platforms, allowing for the creation of reliable, machine-readable DPPs without the need for complex workarounds. This interoperability helps your brand maintain accurate and consistent data across all systems.

Scalability

Why It's Important:
Scalable traceability solutions are key for staying agile to evolving DPP requirements and business objectives, allowing for expansion of traceability efforts across regions and commodities without significant delays.

How BanQu Helps:
BanQu’s blockchain-based solution is both user-friendly and device-agnostic, requiring no additional hardware installation. This makes it ideal for scaling across various locations, even in remote areas with low connectivity. By supporting data collection without the need for smartphones or apps, BanQu ensures that your company can expand their traceability efforts quickly and sustainably, meeting the demands of your growing business while maintaining robust data integrity.

Data Security

Why It's Important:
Protecting sensitive supply chain data is critical for maintaining trust among suppliers and compliance with data protection regulations like GDPR.

How BanQu Helps:
BanQu employs blockchain technology to ensure that all data recorded on its platform is immutable and secure. This tamper-proof system safeguards confidential information from unauthorized access, providing suppliers with confidence that their data is protected. By using a decentralized platform, BanQu can help your company build a credible Digital Product Passports that adheres to the highest standards of data security and privacy. Plus, suppliers have access to their own data, with set roles and permissions, to digitize and automate manual operations and incentive engagement on the platform. 

BanQu | Real-World Digital Product Passports 

The Digital Product Passport is a powerful tool that can unlock value across your supply chain for business growth while future-proofing your access to the EU market. BanQu is an end-to-end supply chain traceability software that helps companies digitize, streamline, & report on critical sourcing and ESG data throughout their operations. Our expert team has years of global experience crafting DPPs across industries – from food and beverage to clothing and textiles. Set up a discovery call with our team today to start your DPP journey on the right foot. 

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