It’s been just over two years since the initial proposal for a new Ecodesign for Sustainable Products Regulation (ESPR) and its impact on manufacturers is edging closer by the day. The directive - part of the Circular Economy Action Plan (CEAP) - is the EU’s attempt to reduce waste, prompt businesses to act more sustainably, and ultimately, to catalyze the effort towards a more circular economy.
The backdrop to this is of course the global need to galvinize sustainability efforts. Only last year the UN’s Intergovernmental Panel on Climate Change suggested that greenhouse gas emissions need to be cut 43% by 2030 and with an estimated 4.8 tonnes of waste produced by each person in Europe every year - and much of that going to landfill - it’s an effort that is being taken very seriously.
The ESPR will impact manufacturers of selected product groups, including - but not limited to - batteries, furniture, electricals, and chemicals, and it will apply to any product in these (and other specified) categories placed in the EU market, even if the business isn’t EU-based. The framework will set a wide range of requirements, with some of these focused on the sharing and access to data about products. This is why a central part of the regulation will be the mandated implementation of Digital Product Passports (DPPs), to support easy access to data about the sustainability credentials of the products that it applies to. DPPs will be mandated as part of the regulation to provide a better system for stakeholders across the product’s lifecycle to share information and for end-users to access the information to make more sustainable purchasing decisions.
The directive has just been given final approval and as a next step it is expected that delegated acts outlining more detailed requirements will be published in due course. However with no firm date on the horizon, it is important for manufacturers of the product categories impacted to be prepared.
Digital Product Passports explained
A Digital Product Passport (DPP) is in essence a digital record which holds data on a product across its value chain. It can be accessed by scanning a data carrier like a QR code or barcode affixed to the physical product with a device such as a smartphone, and can contain detailed information on a product’s sustainability credentials such as the carbon footprint of production, the materials used to manufacture it, any sustainability credentials it holds, and how to dispose of a product responsibly when it comes to end-of-life so elements have the best opportunity to be recycled.
This is why the EU has seen DPPs as the ideal tool to support circularity. By improving access to information about a product’s sustainability credentials, consumers are able to consciously make more sustainable choices, and they are more likely to recycle if they have the guidance on how to do so.
DPPs will be the responsibility of the economic operator putting them on the market, so for the manufacturers that are also the economic operators the responsibility will fall on them. If they are a contract manufacturer or OEM, they may not hold the overall responsibility however they will likely still be impacted as they may be involved in the process to affix the data carriers or be expected to share information to build the data within a DPP.
Down the line, the manufacturers that are also economic operators could potentially use the information gained about their products’ supply chain to plan for ways to make it more sustainable, from analysing the sourcing of materials, to reevaluating the partners they work with. It can also hold information on warranty or after-sales care, which means that manufacturers can expand the functionality to serve different purposes, and comply with multiple upcoming regulations (e.g. the EU’s Right to Repair).
How manufacturers can begin preparation now
While we are still waiting for the delegated acts to be confirmed, there are things businesses can do now to be in the best starting position for when they need to begin reframing business processes for compliance. One of these is assigning a DPP lead or a group within the business who will lead the effort. They would be responsible for researching what we know today about the regulation, seeking advice about implementation and DPP partners to work with, and crucially, beginning to map the supply chain to determine where data may need to be sourced from to input into the DPPs once the exact requirements have been specified.
Eventually once this information becomes available, the business would be in a position to move forward with strategy creation, being able to outline clear actions, goals, and timelines from a point of knowledge, rather than starting from ground zero.
Paving the way for a green future
The EU DPP mandate is at the forefront of the circular economy movement, but its complexity demands careful and timely implementation from businesses. Preparation will likely involve numerous discussions with different stakeholders and ecosystem partners, which means that the journey to effective implementation will surely be long and challenging.
However, with many manufacturers already having their own aims for sustainable processes, this directive simply serves as a nudge nearer towards achieving goals that have been long-desired. With that in mind, the businesses that will see the most benefit will be those who prepare sooner and with a long-term vision in mind, and ultimately, it’s every single small step from today that will bring us all collectively closer to a brighter, greener future.
Lars Rensing, CEO of Protokol
