What DPPs are and why they matter
The end of the Black Box supply chain
For decades, industrial supply chains have operated with limited transparency. Once a component such as a turbine, a battery, or a control module left the factory, its history became opaque. The manufacturer lost sight of the asset while the end user had little visibility into its material composition or repair history. This black box model is incompatible with a circular economy where value recovery depends entirely on access to information.
The Digital Product Passport (DPP) represents the solution to this visibility crisis. A DPP is a structured digital collection of data that travels with a physical product throughout its entire lifecycle. It functions as a digital twin by recording every significant event from the extraction of raw materials to the final recycling process. This is not merely a label. It is a dynamic, decentralized database that grants stakeholders access to critical information regarding durability, repairability, and hazardous substance content.
The economic value of transparency
Data transparency is rapidly becoming a commercial imperative. Assets with verifiable history command a premium on the secondary market. A buyer in the year 2030 will likely refuse to purchase an industrial battery or a piece of heavy machinery if it lacks a digital passport proving its health and origin. The DPP transforms the physical asset into a smart asset that carries its own compliance documentation. This reduces transaction friction and increases resale liquidity.
EU DPP regulation and global spillover
The regulatory timeline
The European Union is currently spearheading the global shift toward mandatory digital transparency. Under the Ecodesign for Sustainable Products Regulation (ESPR), the DPP will become a legal requirement for a wide range of product categories. The timeline is aggressive and specific.
By February 2027, the EU Battery Regulation will mandate that all industrial and electric vehicle batteries with a capacity above 2kWh must carry a unique digital passport. This passport must contain granular data on the chemical composition of the battery, manufacturing history, and state of health. Following batteries, the regulation will expand to textiles, steel, and cement.
The Brussels Effect
While these regulations originate in Brussels, their impact is global. Any manufacturer based in Malaysia, China, or the United States that wishes to sell into the European market must comply. This phenomenon is known as the Brussels Effect and effectively sets the global standard. Companies that ignore these requirements risk being locked out of one of the largest single markets in the world. Preparing for DPP compliance is not just a European compliance task. It is a global market access strategy.
How companies can prepare early
Data infrastructure readiness
The primary challenge for most organizations is the fragmentation of their data. Manufacturing data sits in the Product Lifecycle Management (PLM) system while operational data sits in the SCADA system and repair data sits in a separate maintenance log. To prepare for DPPs, organizations must begin breaking down these silos.
The first step is data standardization. Adopting global standards such as GS1 Digital Link allows for the creation of unique identifiers that can be scanned by any stakeholder in the supply chain. Companies must audit their current data architecture to ensure they can capture and export the specific data points required by the new regulations. These include metrics such as carbon footprint per unit and recyclability indices.
The role of the Lead User
Forward thinking organizations are not waiting for the 2027 deadline. They are launching pilot programs today. By assigning digital passports to a small subset of high value assets, companies can test their data collection processes and identify gaps before compliance becomes mandatory. This lead user advantage allows them to shape the standards rather than merely reacting to them.
Transaction data as the foundation for DPP
From static to dynamic records
A static PDF manual is not a digital passport. A true DPP is dynamic. It must be updated every time the asset is repaired, refurbished, or transferred. This requires a shift from document based record keeping to transaction based record keeping.
Every maintenance event, efficiency test, and ownership transfer must be recorded as a discrete digital transaction. This creates a living history of the asset. When a potential buyer scans the QR code on a pump five years from now, they should see not just the original factory specs but a verified timeline of every service interval.
Blockchain as the trust layer
To ensure the integrity of this dynamic record, the industry is turning to blockchain technology. A decentralized ledger provides an immutable record that cannot be tampered with. If a refurbishment center records that a battery has 85% remaining capacity, that data point is cryptographically sealed. This prevents fraud and builds the high level of trust necessary for a functional secondary market.