Preparing For The EU Digital Product Passport: What Leaders Need To Know

The EU is entering a new era of product transparency and circularity, and digital product passports (DPPs) are at the heart of this transformation. Under the Ecodesign for Sustainable Products Regulation (ESPR), DPPs will become mandatory for most products sold in the EU. For firms operating across global supply chains, this marks a shift as significant as GDPR was for data privacy.

DPP readiness is lagging

A DPP is a verified digital record that travels with a product throughout its life cycle. It contains critical information on composition, origin, repairability, durability, environmental performance and end of life handling, all accessed via a unique digital identifier. The challenge with implementation is that regulatory clarity is still emerging. Delegated acts, sector-specific rules, and horizontal standards continue to evolve, leaving firms uncertain about expectations and timelines. In parallel, implementation pressure is rising. While EU organizations have high DPP awareness (97%), meaningful understanding remains low at just 33%, according to KPMG's European Digital Product Passport Readiness Survey.

The cost of inaction on EU DPP compliance is substantial

According to research from GS1 UK, 79% of businesses fear being barred from trading with the EU if they are non-compliant, with up to 45% of annual revenue at risk for unprepared exporters. Non-compliance could lead to rejected shipments, border delays or complete exclusion from access to a market of over 400 million consumers. For the average UK businesses, failing to meet DPP requirements could mean at least £1.5 million in lost trade revenue each year. Comparable due diligence and trade laws such as the US Uyghur Forced Labor Prevention Act (UFLPA) illustrate the potential scale of financial impact. Since 2022, the UFLPA has led to over $3.9 billion in shipment detentions, with electronics hit the hardest.

Beyond compliance, DPPs present a value creation opportunity

While designed as a regulatory instrument, DPPs offer far more. Enhancing transparency, they enable repairability and servicing, unlocking profitable circular models such as resale – which can double an item’s lifetime value. Organizations can also benefit from greater brand equity, as DPPs increase trust for 71% of consumers, as well as revenue protection through anti-counterfeit authentication. Currently, annual counterfeit trade accounts for over 2% of global imports and about $467 billion in lost sales, with luxury fakes surpassing $110 billion.

Early adopters show how powerful DPP-enabled insights can be, as:

• Burberry’s adoption of digital watermarks cut counterfeit cases in China by 18%, lifting its share price by 7%.
• Pfizer Hong Kong cut counterfeit medicines by 40% in one year with Kezzler's Digital ID solution.
• Decathlon’s DPP-style IDs in rental and subscription services generated $21.1 million in circular sales in 2024, up 24.6% year-on-year, with subscription rentals rising 193% to $21.3 million.

However, capturing this value requires more than ticking a regulatory check-box. Organizations must establish interoperable data architectures, integrate multiple applications and data sources including PLM, ERP, MES and supplier systems, and introduce strong governance, security and role-based access controls. Those who invest early in ecosystem alignment and scalable infrastructure will not only satisfy EU requirements but gain lasting competitive advantage in a more transparent and circular global economy.

To learn more about DPPs, look out for the upcoming report Strategic Focus: Preparing For The EU Digital Product Passport Era.