The EU’s Digital Product Passport (DPP) is a new digital record tracking detailed information about goods, their components and their manufacture.
The DPP is set to launch next year – but attendees at yesterday’s (23 January) Chartered Institute of Export & International Trade public webinar on the subject voiced concern over the complexity of implementing the rules.
A total of 66% of attendees said complexity was their top concern, while a further 19% said the cost of compliance was their major focus.
A majority of attendees (86%) also said they had either heard very little of DPP, or had never heard of it before.
Those looking for additional support on DPP can find a range of resources at the Chartered Institute’s manufacturing support page, which can be found here.
Who’s affected
Imports Advisory Practice lead at the Chartered Institute, Ilona Kawka, explained that the DPP is part of the EU’s efforts to achieve sustainability through its European Green Deal and Ecodesign for Sustainable Products Regulation (ESPR).
It will capture end-to-end supply chain data, which aims to give everyone – from suppliers to regulators – comprehensive information on sustainability on goods. Traceability across goods’ lifecycles is also among the aims, as is making it easy to access information on installation, use and disposal of products.
“DPP will impact a wide range of stakeholders,” Kawka noted, from manufacturers, who will “have to provide information”, to consumers, who will be able to access information about the products they buy more easily online. Partners throughout the supply chain will be affected, she emphasised, while regulatory authorities “will have to develop new tools to monitor compliance”.
‘So many are behind’
Christian Pulman, head of procurement at AESSEAL, also contributed at the webinar to describe how his firm is likely to be affected by DPP.
The mechanical seal manufacturer works across 119 sites in 80 countries, and despite the size of the operation “the easy stuff” has been done on DPP, Pulman says, noting that their product packaging already has QR codes with instructions on installation and proper disposal.
“For me,” he explains, “the biggest issue is the sustainability [aspect].”
“My first concern would be the accuracy and availability of information to meet the sustainability goals under DPP.”
A total of 68% of firms within the company’s supply chain don’t currently have their emissions externally verified, he says, adding that “so many businesses are behind where you think they would be right now.”.
Compliance costs
The challenge identified by Kelly Hayes, meanwhile, who is office services manager for Joseph Cheaney & Sons, a UK-based shoe company, is the sheer “volume of information” the DPP will require.
“We have a vast number of stock-keeping units (SKUs) – in the tens of thousands,” she explains, noting the broad range of shoes provided by the company. “To put all that information together is going to be very costly for us.”
There is also a physical challenge with the DPP’s requirement that information is available on the product itself for its lifecycle, she notes, particularly in the shoe business.
“Where that information has to be on the product is also a concern for us, as a product made from leather cannot have something on it that is meant to stay there for the life of the product, as it will wear away.”
Paul Brooks, the Chartered Institute’s manufacturing lead, said DPP “is being implemented over the next five years or so, and the fact there’s uncertainty – we’re planning for that”.
“We’re addressing it by providing support to members and others to raise awareness. I’d like manufacturers to think of this as an opportunity to differentiate themselves from competitors and to understand exactly what their supply chain looks like.”
How to prepare
Kawka said it was crucial for traders to get a good understanding of the regulation, including by understanding the broader ‘circular economy’ framework the EU is putting in place.
On a more detailed level, she urged traders and stakeholders to review if their technology was ready for the requirements, including current infrastructure, data sharing capacity and data security measures. Stakeholders more broadly should be engaged with too, she said, to help evaluate their preparation for the requirements.
She suggested running pilots within organisations “before the regulations become requirement” to “get ahead of the competition”. It’s also crucial to build internal knowledge within organisations and to have an implementation plan.
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