Almost everything sold in the EU could soon need a so-called digital product passport. This will place new demands on manufacturers and importers in terms of sustainability data. But the new requirements could also lead to entirely new business models.
In 2024, the EU is expected to adopt the Ecodesign for Sustainable Products Regulation, or ESPR for short. The proposal aims to make sustainable products the norm in the EU's single market and reduce the environmental impact of products throughout their lifecycle.
"One part of ESPR is the so-called digital product passport, or DPP," says Hanna Lindén, acting business and innovation area manager for material transition at RISE.
"The digital passports will follow the products and make it possible to easily and quickly get all the sustainability data about the product, from raw material to finished product. It will be on a 'need to know' basis, so not everyone will have access to all the data, but different groups will have access to the data they need. For example, authorities will be able to carry out checks more easily, customers will be able to make informed choices and it will be easier to repair a product".
Collected data enables new business models
Furthermore, the idea is that all this collected data can lead to new, circular business models.
"If you have all the data in one place, it becomes much easier to plan for upgrades, reuse or recycling, for example. In addition, structured data has value in itself. It can form the basis of future business and is expected to reduce environmental impact, as access to information makes environmental impacts visible and can help manufacturers and customers make sustainable choices."
The digital product passport means that products and/or batches will need to have some form of data carrier that accompanies them throughout their lifetime. But how this will work and what it will contain can vary between different product categories.
"Different categories have different conditions and challenges, so there will probably be different requirements for textiles and car tyres, for example."
Getting all the information needed for the product passports will require cooperation
High time for Swedish companies to start preparing
In other words, it is not yet clear how the digital product passports will be designed in detail and what they will cover, but there is no doubt that they are coming.
"Although the regulation has not yet been finalised, as it is being voted on in several different bodies, it is expected that the framework regulation will be finalised in 2024. Then delegated acts for product categories will be drafted, and the earliest ones will probably be ready in 2026 to 2027."
Since many categories of products sold in the EU internal market will be covered, it is high time for Swedish companies to start preparing.
"Even if you are only a subcontractor, and do not sell to the end consumer, you are part of a value chain and are responsible for producing the necessary data. Unfortunately, many companies are not aware of this and have not started to prepare."
But what can you do if it is not yet clear what the final passports will look like? Quite a lot, explains Hanna Lindén:
"First of all, you need to understand what the upcoming legislation means and how it will affect your business."
Secondly, companies need to start looking at the different supply chains they are part of and what their relationships look like.
"Getting all the information you need for the product passports will require collaboration, and companies can start thinking now about whether they have the relationships in place for the increased collaboration that will be required."
Thirdly, it is already time to take stock of the information available about the products and consider how it needs to be expanded and structured. In other words, there is a lot to do, and Hanna Lindén's best advice is to get help.
"I come across certain major companies that possess the resources internally. However, for companies that find the task overwhelming and are uncertain about where to start, seeking assistance from us at RISE is a viable option. We keep a close eye on developments and can let you know what is happening."
Expertise needed for practical work
RISE also has much of the specialist expertise needed to carry out the practical work.
"For example, we have technical expertise in everything from databases to QR codes, as well as business knowledge. Digital product passports can create circular business models, but this requires knowledge of life cycle analysis, reuse, business development and so on. Used correctly, this can be an exciting transition."
