Digital Product Passports

The European Supply Chain Data Revolution

From 2024 the European Union started to implement the regulation on the Digital Product Passport (DPP) to stimulate more environmentally sustainable and circular products. Most people are now aware of the CSRD and the reporting standards in the ESRS like the double materiality assessment (DMA) and the reporting on the IRO’s (see my latest article on CSRD). In this article I will highlight the requirement for all products sold in EU to feature a Digital Product Passport as mentioned in the Ecodesign for Sustainable Products (ESPR). This has huge implications. With both the DPP and CSRD companies face both regulatory pressure and, as I strongly believe, a great opportunity too. While many industry voices have highlighted the technical processes and consumer-facing benefits of DPPs, this article takes a broader, strategic approach. I want to highlight the opportunity and the possibility to create competitive advantage with the DPP and focus on building a compelling business case—detailing operational efficiency gains, cost recovery models, and long-term revenue opportunities. With this I want to help manufacturers navigate the complexities around the DPP and integrate it with broader sustainability mandates, like the CSRD. Many of the things that companies need to do are both needed for the CSRD and DPP, so aligning these needs makes total sense, like verifiable data in the supply chain.

Understanding the Digital Product Passport

The Digital Product Passport in its basic form is a digital file that accompanies a product from the minute the raw material is extracted from the ground, during the production process, and all the way to the time the product is used or disposed of. It is not just a file; it is a significant shift in how data related to products is collected, assured, and exchanged. The DPP, which offers real-time and accurate information regarding a product’s content, carbon impact, and safety standards, is enabled by a digital product passport.? The DPP is a game-changer for manufacturers, regulators, and consumers as it provides real-time, accurate information on the materials used in the product, its sustainability, and compliance with regulations.

Why the DPP Matters

• Enhanced Transparency and Trust: Verified and centralized data increases the level of trust in the system for all the stakeholders. The consumer experience of simply scanning a product label to reveal its full lifecycle details is revolutionary—and companies that master this transparency can turn compliance into a competitive advantage.
• Enabling a Circular Economy: The DPP enables the reuse,?refurbishment, and recycling of products by identifying material compositions and lifecycle impacts. This supports initiatives such as the?EU’s Circular Economy Action Plan, as well as regulations like Ecodesign for Sustainable Products Regulation (EU Official Journal).
• Regulatory Alignment and Innovation: The DPP, when integrated with mandates such as the CSRD, is not only a tool for compliance but also for driving innovation in product design?and sustainability reporting. Independent industry analyses have further stressed the significance of these integration.

The Strategic Business Case: Data, Costs, and Fractional Revenues

Most articles focus on?the technical implementation of DPP, including data preparation, blockchain validation, and API integrations. Consider?the following scenario:

Example Scenario: A Mid-Sized Electronics Manufacturer

Costs:

• Technology Investment: Initial Investment: It can be anywhere from €15,000 to €50,000 per product line, depending on legacy system integration. Recurring Costs: It can range between €10–20 per unit for data storage and processing (eg. using blockchain technology)
• Process Overhaul: Training and re-engineering processes may add an additional cost of €5–10 per unit in the short term.

Revenues and Value-Add:

• Operational Efficiency: Better data transparency can lead to the prevention of waste and increase recycling/upcycling, which can save 2-5% in material costs.
• Customer Trust and Premium Pricing: Having a sustainable story told by verified sustainability credentials means manufacturers can charge 3-7% more.
• Data Monetization: Product data can be aggregated and anonymized and used to form partnerships with sustainability?indices or circular economy platforms, which can result in additional fractional revenues of €1-3 per unit.

Industry-Specific Insights

• Electronics: Integration Cost: €15–30 per unit Added Value: A 3–7% pricing premium plus 2–5% material cost savings. Case in Point: With annual production volumes of 100,000 units, the cumulative benefits could recoup integration costs within 1–3 years.
• Textiles: Integration Cost: €2–5 per unit Added Value: Enhanced consumer trust translating into a 2–5% premium, alongside improved recyclability and reduced waste.
• Batteries: Integration Cost: €5–10 per unit Added Value: This can lead to 3-6% savings in material recovery by enabling recycling and second-life applications, with early pilot projects like the Battery Pass Project.

These figures are indicative and show?that making investments in DPP technology can lead to a lot of long-term benefits in terms of costs and revenues.

A Tangible Roadmap to DPP Implementation

To move forward to a digitalized product lifecycle management, a clear and strategic roadmap is required. Below is a step-by-step process?that you can follow to achieve your goal based on recent industry research and independent sources.

1. Assess Your Current State Tool: Perform a digital audit using established frameworks and technical guides (e.g., HHC Earth’s Technical Implementation Guide). Action: Determine where the current system has weaknesses and perform an assessment on the supply chain’s readiness.
2. Engage with Stakeholders Tool: Form cross-functional teams including IT, sustainability, legal, and supply chain experts. Action: Consult with initiatives such as the World Economic Forum’s Digital Product Passport Initiative and review feedback from the Commission Public Consultation.
3. Develop a Digital Strategy Tool: Utilize digital strategy templates and guidance from the Digital Europe Programme. Action: Map out technology investments, process changes, and timelines that align with DPP and CSRD requirements.
4. Invest in Robust Technology Tool: Evaluate platforms that support secure, blockchain-based data management—such as those offered by eg. mintBlue, Circularise and SAP. Action: Ensure your chosen solution supports immutable record-keeping and scalability.
5. Pilot and Scale Tool: Run pilot projects using industry-specific use cases (as seen in pilots like the Catena-X Automotive Network DPP Pilot). Action: Analyze outcomes, refine processes, and prepare for broader deployment.
6. Ensure Continuous Improvement Tool: Establish KPIs and monitoring dashboards with advanced data analytics tools. Action: Stay updated with regulatory changes through sources such as Data.europa.eu and the EU’s official publications.

Data in the Supply Chain

Data is the lifeblood of modern supply chains, providing the insights necessary for achieving transparency, efficiency, and sustainability. As I emphasized in my latest article "The Digital Supply Chain Revolution" (November 11, 2024), and yes, I know it’s completely inappropriate to quote oneself in one’s own article, but still, hey, it’s my article, so here’s my quote:

"Whether a consequence of pro-action, action or reaction, ultimately supply chains will have to deliver in a sustainable, even circular, manner. The leaders will pro-act, steering the very regulation that will ultimately disenfranchise the laggards."

This perspective underlines that comprehensive, real-time data—spanning time, energy, and material consumption—is essential for minimizing waste and unlocking cost savings. By leveraging integrated data systems, companies can monitor every stage of their supply chain, identify inefficiencies, and drive sustainable practices that not only comply with regulations but also create new revenue streams.

Addressing Challenges: Interoperability, Data Integrity, and Ownership

While standardizing data across fragmented systems presents challenges, strategic planning and cross-industry collaboration can bridge these gaps. Key measures include:

• Adopting Open Standards: Utilize guidelines from organizations like GS1 and the World Business Council for Sustainable Development.
• Leveraging Decentralized Technologies: Integrate blockchain and federated data models to ensure data integrity and facilitate interoperability. Leading technology platforms, such as Circularise, and mintBlue have set the benchmark in this space while there's a big difference in how the companies make use of the blockchain.
• Defining Clear Accountability: Establish robust internal data governance and cross-supply-chain models to minimize misinformation risks.

Blockchain as the Foundation for Digital Product Passports

As the sustainability and supply chain transparency regulation increases and is fueled by the EU Digital Product Passport (DPP), Corporate Sustainability Reporting Directive (CSRD), and the Digital Supply Chain Act, organizations are facing increasing difficulties in ensuring data accuracy, accessibility, and compliance. Conventional approaches, including centralized databases and legacy SaaS platforms, are failing to offer ‘tamper-proof’ evidence, decentralized identity and easy integration across sectors.

Blockchain technology is now considered the best way to address these challenges by providing end to end traceability, cryptographic security and real time proof of product identity at item level. Because blockchain does not have a central point, product details, sustainability information, and supply chain data are impossible to alter, hidden, or lost during the product’s use.

?Several existing solutions attempt to address DPP needs:

·????? Classic SaaS solutions (SAP GreenToken, IBM Food Trust): These are built on centralised data stores which rely on the trust of a third party and are thus vulnerable to data corruption.

·????? Standards such as XBRL and EPCIS:? Although widely applied to corporate reporting and supply chain visibility, they are not secure and cannot be used in real time.

·????? Private or Permissioned Blockchain Solutions (VeChain, OriginTrail, Circularise): Some of these also provide blockchain enabled traceability but the data reliability and accuracy is still dependent on off-chain sources.

To be effective at scale, Digital Product Passports require a public, decentralized and cryptographically secure solution to guarantee compliance, interoperability, and data archival, on product level. Hence, blockchain combined with on-chain product level data hashing is gradually becoming the standard for digital transparency in today’s supply chains. mintBlue is an example of such a solution.

Conclusion: Leveraging Compliance to Create Competitive Advantage

The European Digital Product Passport is not just a regulatory requirement, it is an asset that if implemented properly can enhance operational efficiency, market position and top line. By taking a business case approach that includes cost analysis, operational improvement, and clear implementation plan, organizations can convert the DPP compliance challenges into long term competitive advantages.

Key Takeaways:

?????????? Cost Efficiency:

The avoidance of material dissipation and the simplification of the recycling processes are real in terms of costs.

?????????? Revenue Enhancement:

Being able to charge more for a product and monetize the collected data is a source of additional revenue per unit.

?????????? Strategic Positioning:

?The early adopters of the DPP technology will gain from the improved brand reputation and better regulatory compliance.

It is time to act. It is time to digitize, to build the frameworks that will support the next level of product management, and to invest in robust technologies as the journey to a transparent, circular and climate neutral economy continues. The integration of Digital Product Passports will be a key differentiator in a market that is becoming increasingly competitive in the years to come.

Sources and Further Reading

• Official EU Sources & Legislative Documents:
• European Commission – Digital Product Passport Overview
• Commission Public Consultation on Digital Product Passport
• EU Official Journal – Ecodesign for Sustainable Products Regulation
• Digital Europe Programme

• Industry Reports & Analysis:
• Forbes: The Future Of Manufacturing With Digital Product Passports (2024)
• Deloitte: Embracing Digital Product Passport as a Regulatory Requirement (2024)
• Forrester: A Digital Product Passport Needs More Standardization And Fewer Standards (2024)

• Technology & Implementation Providers:
• Circularise – Blockchain for Digital Product Passports
• SAP DPP Implementation Solutions

• Independent Articles & Industry Voices on LinkedIn:
• “Sustainability Meets Innovation: How DPP is Brought to Life?” (January 27, 2025)
• “The Digital Product Passport (DPP): Impact and Opportunities” (July 26, 2024)
• “ESG and the Digital Product Passport” (December 12, 2024)
• “Digital Product Passports: Impact and Opportunities” (January 29, 2025)
• "Insights on interoperability in the DPP space" (January 29, 2025)

By combining the findings from these separate sources and using a forward-looking financially driven strategy, your organization can move forward with certainty in the dynamics of the DPP revolution and achieve market leadership in the new digital sustainability world. Join the revolution now—because the future of product transparency, sustainability, and profitability is already here. Fee free to reach out and have a chat! Mail me at: [email protected]