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All about the EU Eco-design regulation and Digital Product Passport (DPP)

All about the EU Eco-design regulation and Digital Product Passport (DPP)

Part 1: General questions on the DPP Regulation

What is the regulatory context around Digital Product Passport? 

The European Digital Product Passport (DPP) is a part of the European Union's broader efforts to promote sustainability and advance the goals of the European Green Deal. Within the framework of the Ecodesign for Sustainable Products Regulation (ESPR), the objective is to help achieve a 55% reduction in CO2 emissions by the year 2030, in comparison to the levels recorded in 1990. Furthermore, the overarching goal is for Europe to become the world's first climate-neutral continent by the year 2050.

The Digital Product Passport is a digital tool that aims to provide consumers and businesses with greater transparency and information about the environmental and sustainability aspects of products placed on the EU market. The goal is to encourage more Sustainable Product: create the condition for better repairing and recycling of all the products distributed in the EU.

As the name suggests, every product introduced by a business to the EU market will be required to have its own distinct information passport. Access to this passport will be facilitated through a data carrier linked to a unique product identifier.

Scope of the regulation

The regulation applies to any physical good placed or put into service on the EU market, specifically focusing on the first supply/use of the product, excluding second-hand goods. It affects almost all products with few exceptions, such as food, feed, medicinal products, veterinary medicinal products, living plants, animals and microorganisms.

What are the objectives of the Digital Product Passport regulation?

  • Accelerate the transition to circular economy, boosting material and energy efficiency, extending product lifetimes and optimising product design, manufacturing, use and end of life handling
  • Provide new business opportunities to economic actors through circular value retention and optimisation (for example product-as-a-service activities, improved repair, servicing, remanufacturing, and recycling) based on improved access to data
  • Help consumers in making sustainable choices 
  • Allow authorities to verify compliance with legal obligations

Priority product groups

  1. Textiles, including garments and footwear
  2. Furniture, including mattresses
  3. Energy-related products and ICT products, such as computers and hardware

When will Digital Product Passport have to be implemented?

Brands must anticipate EU regulations with the roll-out of DPP requirements expected to begin mid 2027. Immediate impacts are already seen with existing requirements in France’s AGEC Law and sector-specific regulations.

Adoption among brands is expected as early as 2024. Initiating preparations in advance will grant you the opportunity to experiment, test, learn, and refine your strategy, ensuring optimal readiness by the time the regulation takes effect.

What are some key design elements for Digital Product Passports?

When creating the DPP, these following choices need to be clearly incorporated into the upcoming standards to ensure their effectiveness in implementing policies. Specifically:

  1. Decentralized Data Storage: Ensures data is securely stored and accessible.
  2. Product Linking: Each DPP is linked to a specific product.
  3. Granularity Levels: Data can be accessed at three levels—model, batch, or item.
  4. Access Control: Data access is on a need-to-know basis, with both public and restricted data.

What are some main requirements for brands?

Brands are required to:

  • Ensure the DPP exists, is complete, authentic, reliable, and verified.
  • Store a backup of the DPP with a certified third-party provider.
  • Make the product identifier available to dealers and online marketplaces.

What are the key data required in a Digital Product Passport?

The eco-design regulation framework, which received final approval from the EU Council on May 27, 2024, includes legislation and expected product-specific measures. A pivotal element of this regulation is the requirement for DPPs to include detailed product information, such as:

  • Durability, reusability, upgradability, and reparability
  • Energy and resource use/efficiency
  • Recycled content
  • Possibility of remanufacturing and recycling
  • Environmental impacts
  • Carbon and environmental footprints

What are the components of an EU Digital Product Passport? 

  1. Data Carrier (Physical Identifier): This takes the form of a QR code, RFID chip, or similar feature located on the product or its packaging. It grants consumers immediate access to product information. This should be built upon an internationally recognized standard, and unique for each product.
  2. Data Storage and Access System: A reliable platform, which ensures trust, confidentiality, and easy access to data. 
  3. Harmonized Standards: A set of rules and formatting guidelines for collecting and encoding the information in the Digital Product Passport. 

What impact will DPPs have on entities beyond the EU borders? 

The ESPR will establish criteria that will influence products originating both within and outside the EU.

For more specific questions on DPP system, DPP data, and DPP governance, you will find information on the CIRPASS website.

What are some benefits of Digital Product Passport?

The potential benefits of the Digital Product Passport can extend beyond the current emphasis of the European Commission on transparency in upstream product data. The DPP can drive a transformative shift in consumption by unlocking five levels of utilities:

1. Access to product information

2. Certification of authenticity and ownership

3. Product lifecycle management tool

4. Customer relationship management (CRM) tool

5. Virtual representation of physical objects

Any augmentation in the range of DPP utilities is likely to promote wider adoption and utilization of the DPP. 

Part 2: 3 different data architectures for Digital Product Passports

What are some technologies architectures for Digital Product Passport?

Centralized Digital Product Passports:

  • Passport accessible through a web page or app using the physical product identifier
  • Passport information stored in centralized databases, either managed by a single third-party or linked through a third-party portal
  • Access and editing permissions overseen by a third-party platform

Permissioned Blockchain Digital Product Passports:

  • Passport accessed via a physical identifier and stored in either a custodial or brand-specific central wallet
  • Passport data resides on a private or consortium blockchain, accessible to platform members
  • Passport usage confined within a closed ecosystem
  • Access and editing permissions controlled by ecosystem owner(s)

Tokenized Digital Product Passports:

  • Passport obtained through a physical identifier and stored in either a custodial or non-custodial wallet
  • Passport information encoded as an NFT on a public blockchain
  • Passport intended for use in an open ecosystem
  • Access and editing permissions managed via encryption keys
  • Passport designed for interoperability with standardized formatting

What is the best solution for Digital Product Passport?

From operational and business standpoints, tokenization can outperform alternative technological frameworks.

  • Implementing a tokenized Digital Product Passport on a public blockchain establishes trust, ensures the security of sensitive information, and avoids complex IT integrations thanks to its native interoperability.
  • Tokenization broadens the scope of potential applications, offering tangible advantages to both brands and consumers. It reinforces trust on second-hand markets, promotes access to add-on services, increases brand engagement with minimal data sharing, and paves the way for bridging physical and digital worlds. 
  • Thanks to web3, consumers can truly own the digital counterpart of their product, just as they own the physical product. This allows consumers to remain connected and engaged with brands in a dynamic and respectful way. 

Source: The case for native Digital Product Passport tokenization by BCG x Arianee

Part 3: Arianee solutions for Digital Product Passports

What is Arianee doing to help brands prepare? 

Arianee has already empowered multiple brands from various verticals to implement Digital Product Passport beyond just transparency and circularity needs. We take it one step further and create a more direct line of communication with end-consumers, turning all products into an engagement platform where utilities can be updated throughout the product life cycle. 

Through easy-to-manage interfaces and end-to-end solutions (Arianee NFT Management Platform, Wallet Solutions, Web3 Toolings suite), we help brands seamlessly onboard consumers through a single click. 

Explore how Breitling harnessed DPP on large scale through Arianee in our brand use case.

How can I, as a consumer, access a Digital Product Passport? 

Digital Product Passport should be made as accessible as possible:

1. Find the physical identifier (QR code, NFC chip, etc.).

2. Scan or input it on an app or website.

3. Discover the Digital Product Passport 

Here at Arianee, we provide a simple and intuitive process. A simple tap grants consumers instant access to the Digital Product Passport (in the form of an NFT) and an Ethereum wallet, all without requiring crypto knowledge. Brands can also distribute DPP through existing client accounts. In addition to transparent data, consumers access services like repair, re-commerce, and recycling while staying connected with the brand. Notably, the DPP is no longer a static QR code tag, but has become a dynamic asset that will evolve in users' wallets.

Examples of Digital Product Passport

Here's an illustration of what a Digital Product Passport looks like when employing the Arianee wallet solution (with the option for a white label wallet).

Unique features include but not limited to:

  • Claim the Digital Product Passport in one click
  • Discover the product’s information and exclusive services offered by the brand
  • Access product’s historical records
  • Register important events in the product life cycle on blockchain
  • Receive direct-to-wallet messages 
  • Easily prove ownership online and offline without disclosing personal information

Explore the different use cases of Digital Product Passport for Appliances and Wine.

How can brands and tech enablers prepare for the Digital Product Passport regulations? 

As regulators are working on the granularity of the Digital Product Passport across all industries and create incentives to promote the implementation and interoperability of the relevant technologies, we, as brands and enablers, are tasked with the following responsibilities:

  • Brands: Brands will need to evaluate technology architecture that maximizes the utilities (or use cases) they want to achieve through DPPs. Additionally, they will need to carefully think about future customer journeys leveraging DPPs to boost circularity and transparency. 
  • Technology Providers: As a technology provider, they will need to improve the scalability and interoperability of Distributed Ledger Technology by providing a simple and cost-effective solution and by developer user-friendly tools and interfaces to access the blockchain (read more about the Arianee NFT Management Platform
  • Stakeholders: It is important to work on technology acceptance by educating consumers and staff on blockchain and its uses.

Read more on this topic:

From Consumers to Super Users: The Power of Digital Product Passports for CRM

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