What is a DPP?
A DPP is a digital record, for example in the form of a QR code which can be scanned with a smartphone, revealing information on the product’s origin and composition, repair and disassembly options, and how to recycle or dispose of the different parts of the product.
It works by generating a digital replica of a tangible product, recording all events, transactions, and sustainability-related information throughout its lifecycle. This information can be updated and verified through technologies like blockchain to securely store data.
DPPs are particularly advantageous in business-to-business (B2B) environments, where each party involved must achieve its own sustainability objectives. DPPs facilitate better communication across supply chains whereby the different supply chain levels can gain a deeper insight into a product and be conveyed to consumers when necessary. This ensures transparency across the entire supply chain network.
The circular economy
In the current linear economy, also known as the “take-make-waste” economy, resources are turned into products, used, and then disposed of as waste. This creates over 2 billion metric tons of annual household waste globally, with a projected 70% increase by 2050.
A circular economy addresses this and facilitates the transition to less waste and more sustainable value chains. It is a system where materials and products remain continuously useful through processes such as reuse, remanufacture, recycling, maintenance, or composting.
So, waste and pollution can be reduced, products and materials are circulated at their highest value, and nature is restored.
However, circular economy markets rely on full transparency of material and product properties to better inform decision-making by stakeholders such as regulators, consumers, and businesses.
In the linear economy, this information is mostly unavailable as it is not transferred along the supply chain.
This is where DPPs can help. DPPs improve the transparency and traceability of a product’s lifecycle environmental impacts, enabling better decision-making when purchasing, repairing, or recycling.
The EU’s adoption of DPPs
As part of the EU’s broader Circular Economy Action Plan for a more sustainable and economically robust future, it is introducing DPPs.
The intention is to help consumers and businesses make more sustainable purchases and support authorities with the enforcement of legal requirements.
EU implementation of DPPs is expected to occur between 2026 to 2030. Certain industries with significant environmental impacts, such as those producing batteries, vehicles, and plastics, have been prioritised to legally comply with the DPP in a phased manner.
By 2026, batteries must adopt DPP after which the other industries will have to comply.
How DPPs are advantageous
A DPP holds significant potential to deliver benefits to a variety of stakeholders across a product’s value chain.
The benefits of implementing DPPs include:
Enhanced transparency and traceability:
- More streamlined cross-border operations, including customs processes.
- Facilitates product compliance verification.
- Ability to track substances of concern.
- Address product liability challenges.
Improved sustainability practices:
- Accelerates transition to a circular economy through encouraging resource optimisation and energy efficiency strategies.
- Supports sustainable supply chains as businesses can identify and prioritise sustainable sourcing.
- Extends product lifecycles through an awareness of options to extend a product’s lifespan.
- Supports businesses monitoring and reporting against sustainability indicators.
Increased competitiveness:
- A competitive advantage can be gained as consumers increasingly demand sustainable and transparent products.
- Encourages new and innovative business opportunities through circular economy optimisation and value retention.
Challenges and concerns
Implementation of a technological tool like DPP is not without its challenges. These include:
Data security:
- Robust security measures must be taken to protect sensitive information and DPPs will need standardisation to ensure interoperability and safety for all stakeholders to embrace DPPs.
Installation costs:
- Initial set-up and maintenance costs for DPP will require substantial investment into technology and human resources, most likely to affect SMEs.
Consumer understanding:
- To achieve the intended benefits of implementing a DPP, customers must be willing to learn how to use the tool.
- Educational programmes would need to be developed to use the tool to its full potential.
Businesses seeking to gain greater control by acting proactively, rather than reactionary, should consider early adoption of DPPs which can substantially mitigate operational and compliance risks. By taking action now, businesses have the opportunity to position themselves as leaders of their industries.
