No doubt that the shift toward circularity is (and will even become more prominent in) reshaping product innovation, compliance, and lifecycle management. As regulations tighten—particularly in the EU—businesses must rethink how they track, trace, and validate product data. The Digital Product Passport (DPP) emerges as a critical enabler, bridging sustainability objectives with operational realities through standardized, real-time data access across the supply chain.
DPP, Circularity, and Regulatory Momentum
Circularity is a systemic approach to eliminating waste and extending product lifespans through design, remanufacturing, and material recovery. The DPP, by contrast, is a structured digital framework that records and communicates key sustainability and compliance data. It supports circularity by ensuring transparency in material sourcing, recyclability, repairability, and carbon footprint tracking. However, a DPP alone does not guarantee circularity. While it facilitates regulatory compliance and responsible material use, true circularity depends on integrating closed-loop design principles.
For instance, the EU Ecodesign for Sustainable Products Regulation (ESPR) mandates product-specific data disclosure, enabling circular economy models but not enforcing them. According to the European Commission, “This initiative […] aims to enhance transparency across product value chains by providing comprehensive information about each product’s origin, materials, environmental impact, and disposal recommendations. The DPP is designed to close the gap between consumer demands for transparency and the current lack of reliable product data.”
The EU is leading the way, with the EU Battery Regulation requiring digital traceability for battery materials. China is advancing digital product transparency in electronics and automotive sectors, while the US is exploring standardization initiatives. However, DPP adoption varies across industries. Sectors with high regulatory oversight, such as automotive and electronics, have made faster progress, while industries like fashion and consumer goods are still navigating data standardization and enforcement challenges.
Business Implications: Quality, Trust, and Competitive Edge
Beyond compliance, DPPs reinforce product quality, customer loyalty, and brand reputation. High-quality documentation of material origins, durability, and repairability enhances consumer confidence and aligns with evolving expectations for sustainable consumption. Companies that implement robust digital tracking can differentiate themselves and future-proof their business against stricter regulations.
Philips exemplifies this by tracking medical equipment components digitally to extend product lifecycles through remanufacturing. Similarly, BMW integrates digital passports into its Circular Economy strategy, ensuring compliance while optimizing material flows for recycling. The automotive OEM has been actively integrating DPPs into its operations to enhance sustainability and transparency. For example, in collaboration with Siemens, BMW implemented a proof-of-concept for this passport, aiming to monitor material flows efficiently and ensure compliance with recycling targets. This project serves as a foundation for BMW’s circular economy strategy, enabling the company to meet legal requirements and establish effective recovery strategies.
Integrating DPP into Product Lifecycle Governance
Embedding DPPs into the product lifecycle management (PLM) framework ensures sustainability goals are met at critical development stages. Key integration points include:
- Concept validation – Assessing design choices for recyclability and material impact.
- Design freeze – Confirming compliance with DPP requirements and circular economy criteria.
- Production ramp-up – Ensuring supply chain partners adhere to data-sharing protocols.
- End-of-life planning – Defining material recovery, reuse, and recycling strategies.
Strong governance across engineering, compliance, procurement, and sustainability teams is essential. Companies must ensure interoperability, security, and real-time lifecycle accuracy in their data-sharing systems.
Scaling Adoption: Risks and Opportunities
As sustainability regulations mature, businesses must remain agile. While ESPR and related policies provide a roadmap, upcoming legislation will likely introduce stricter carbon footprint reporting and circularity mandates. Organizations that proactively implement DPP infrastructure will mitigate regulatory risks while gaining a competitive edge.
Key risks include:
- Increasing complexity – Managing multiple regulations across jurisdictions.
- Data management burdens – Ensuring DPPs remain updated and audit-ready.
- Supply chain dependencies – Enforcing data-sharing compliance among suppliers.
Conversely, companies that lead in DPP adoption can influence industry standards, shape regulatory discussions, and position themselves as sustainability frontrunners. As Gartner predicts, “By 2027, at least 50% of global product-centric businesses will have adopted some form of Digital Product Passport to meet regulatory requirements and improve circularity metrics.”
The challenge now is ensuring these frameworks go beyond compliance to drive real transformation. Will businesses leverage DPPs as mere reporting tools, or as catalysts for broader systemic change? And how will regulators balance enforcement with innovation to accelerate meaningful circularity?
What are your thoughts?
Disclaimer: articles and thoughts published on v+d do not necessarily represent the views of the company, but solely the views or interpretations of the author(s); reviews, insights and mentions of publications, products, or services do neither constitute endorsement, nor recommendations for purchase or adoption.
About the Author
