Businesses today are under growing pressure to reduce their environmental impact and operate with greater transparency. Driven by tightening regulations and shifting consumer expectations, organizations are rethinking how they design, produce, and manage products across their lifecycles.

The Digital Product Passport (DPP) has emerged as a valuable new tool in this effort, requiring companies to track, measure, and share sustainability data across the entire product journey. However, with evolving legislation, technical requirements, and operational implications, many organizations are still trying to understand what DPPs mean for their business.

In Aras’ latest webinar, Sustainability and Beyond: The Impact of Digital Product Passports, QCM’s Jörgen Ekblad, Martin Lundqvist, and I joined forces to provide insights into how DPPs work and their role in driving sustainable practices, meeting regulatory challenges, and enabling a circular economy.

What is a Digital Product Passport?

A DPP is a digital record that contains essential information about a product, including its materials, substance content, repairability, and potential for recycling. This tool serves as a comprehensive data package that can follow a product through its entire lifecycle. It provides transparency, empowering businesses to make informed decisions and helping consumers choose products with a low environmental impact.

The European Green Deal

The drive for DPPs is the result of the EU Green Deal, which promotes stronger sustainability efforts and greater accountability in product design and lifecycle management. With a goal of becoming the first climate-neutral region in the world, the EU created the Green Deal to set ambitious targets for reducing carbon emissions, promoting renewable resources, and enhancing waste management.

The circular economy: A foundation for sustainability

The circular economy is a concept that forms the foundation of the EU Green Deal. Unlike a traditional linear economy, which follows a take-make-dispose model, the circular economy focuses on keeping products and materials in use for as long as possible. This approach minimizes waste and encourages reuse.

As Lundqvist explained, DPPs are crucial to this model because they offer visibility into a product’s materials and components.

“By providing a digital trail of a product’s entire life, DPPs make it possible to reclaim valuable materials, reduce environmental impact, and extend product lifecycles through remanufacturing and repair.” – Martin Lundqvist, CTO at QCM

How DPPs work

DPPs gather detailed product data, often stored on a blockchain or similar technology, to ensure security and authenticity. These passports include information such as materials’ origin, sustainability certifications, and guidance on recycling and disposal. They are shared across the supply chain, from manufacturers to consumers, ensuring everyone can access the product’s complete lifecycle information.

General rules for DPPs

While many technical and legislative details are still being finalized, the following foundational rules are already emerging for DPPs under upcoming EU regulations:

1. Responsibility

The company placing a product on the market is fully responsible for the data within the DPP.

2. Data format

DPP data must be open, machine-readable, structured, and searchable. Accepted formats include standardized structures like XML, ensuring interoperability and accessibility across systems.

3. Unique identifiers

Each product must carry a unique identifier, e.g., GITN, that links directly to its DPP, and this identifier must be physically present on the product or packaging. It can include technologies like QR codes, RFID, and must guarantee traceability, as scanning should always lead to that specific product.

4. Granularity levels

Different product categories will have different DPP detail levels. These granularity levels determine how specific the information in a DPP must be, depending on the product type and how it’s manufactured:

  • Item level: For unique, serialized items that require individual tracking (e.g., laptops)
  • Batch level: For standardized goods produced in groups (e.g., bottled beverages)
  • Model level: For uniform products where batch information is less relevant (e.g., ceramic mugs

5. Access rights

Data access will be managed on a need-to-know basis and will be further outlined in upcoming legislation.

  • Public-facing data (e.g., carbon footprint) will be accessible to all
  • Restricted data (e.g., exact material composition) may be limited to recyclers, repair services, and customs authorities

6. Product lifetime

The DPP must remain accessible throughout the entire product lifecycle. Lundqvist explained that definitions around “entire lifetime” are still being clarified but could be years or decades, depending on the product.

7. Data preservation in case of bankruptcy

If a company goes bankrupt, the DPP data must be transferred to a certified third-party repository. There is an ongoing debate about whether such repositories must be EU-based.

Impact of DPPs

As Ekblad explains, the introduction of DPPs represents a shift in how businesses approach sustainability and product lifecycle management.

This shift is tied to multiple facets of an organization, from compliance and supply chain coordination to innovation, data strategy, customer engagement, and indeed, new business models.

“A Digital Product Passport is just the tip of the iceberg.” – Jörgen Ekblad, COO at QCM

Regulatory compliance

As regulations tighten, DPPs force businesses to build ongoing, data-driven practices that support transparency and traceability. Beyond meeting mandates, DPPs require organizations rethink how they manage materials, collaborate with suppliers, and engage with customers around sustainable choices.

Supply chain collaboration

For DPPs to function effectively, organizations must strengthen collaboration with suppliers. This extends beyond just the components sourced; it includes ensuring that sustainability data travels seamlessly through the supply chain. Improved digital infrastructure is crucial, ensuring accurate data is available throughout the product’s lifecycle.

Consumer relations and market opportunities

The growing demand for sustainable products is a significant market opportunity. Companies that embrace early adoption of sustainable practices and use DPPs to showcase their products’ sustainability credentials will boost consumer trust and loyalty.

Innovation and new business models

The demand for sustainable products drives product design and manufacturing innovation. DPPs encourage the exploration of new materials, sustainable manufacturing techniques, and more durable products. Businesses will be incentivized to think beyond product creation and pave the way for more circular business models.

Product design and lifecycle management

Incorporating sustainability principles early on in product development is essential. DPPs empower engineers and product designers with real-time, actionable data. Ekblad notes that this proactivity ensures the product is designed with sustainability in mind from the outset.

“Over 80% of a product’s environmental impact is determined during the design phase.” – Jörgen Ekblad, COO at QCM

Data management and technology integration

Many companies still rely on traditional processes and tools like spreadsheets for product lifecycle management (PLM), which is inadequate in an age of digital transformation. However, the move to more efficient digital solutions demands a faster, more structured approach to data management. This includes ensuring that all internal and external stakeholders, including suppliers and partners, speak a common language about sustainability.

Waste reduction and brand reputation

Adopting DPPs can significantly reduce waste by making it easier to track and repurpose materials at the end of a product’s life. This strengthens a company’s reputation as a responsible and forward-thinking brand.

People, processes, and data: A unified approach

I explained that successfully implementing DPPs demands a strategic, cross-functional approach that connects people, processes, and data across the entire product lifecycle.

At the center of this effort is the digital thread, a foundational framework that enables seamless data integration from design and production through use and eventual disposal. A digital thread weaves all relevant product data into a single, accessible view. This ensures:

  • Data integration and continuity: DPPs are only as strong as the data behind them. A digital thread ensures that all data is connected, current, and contextual across the lifecycle.
  • Enhanced traceability: Teams and partners can confidently trace product origins, material inputs, and environmental impact.
  • Improved data accuracy: Consistent data governance across tools and teams reduces errors and verifies sustainability claims.
  • Lifecycle management: The digital thread supports decisions at every stage, enabling a more circular product strategy.
  • Regulatory compliance: With DPP regulations taking shape, a structured, audit-ready data backbone is essential.
  • Customer transparency: By making trusted data accessible to stakeholders and end-users, companies can strengthen brand trust and demonstrate accountability.

Looking forward: How the Aras platform supports DPPs

By leveraging a digital thread platform, companies can embrace DPPs and ensure they contribute to building a more sustainable future. With Aras Innovator®, organizations can capture and manage all the required data for a product’s lifecycle, from raw materials to recycling potential. This centralized data hub helps streamline compliance with regulatory standards while promoting a more sustainable product development and lifecycle management approach.

To learn more, watch the entire webinar here.

Category:
Aras Insights Supply Chain Sustainability