Brought to you by Tian Daphne, Serena Gariboldi, and Daniel Gregory from Circularise

As industries move towards more sustainable and circular supply chains, compliance with evolving regulations has become increasingly important. One key tool that is emerging to help businesses navigate regulatory requirements is the digital product passport (DPP). DPPs provide a detailed, digital record of a product’s lifecycle, from raw materials to disposal or recycling, offering transparency and traceability that is essential for meeting sustainability standards.

Products aren’t governed by just one regulation — they must meet multiple requirements simultaneously. DPPs streamline compliance, a real game-changer that eliminates the need for separate audits and scattered certifications. This not only simplifies regulatory adherence but also ensures companies can quickly adapt to new or changing regulations.

The ability to prove compliance instantly can mean the difference between a successful market entry and unexpected fines or costly recalls. This article provides a breakdown of how DPPs help businesses in various industries to comply with regulations and which regulations they can aid in fulfilling.

What is a digital product passport (DPP)?

A digital product passport (DPP) is an electronic, data-rich record of critical information about a product, including its materials, manufacturing processes, usage, and recyclability. Intended to provide transparency throughout the lifecycle of a regulated product, it is a combination of various technologies working together that allow manufacturers, consumers, and regulators to access detailed information on how that product was made, what materials it contains, and how it can be reused or recycled.

How can DPPs help with regulatory compliance?

1.    Meet Extended Producer Responsibility (EPR) requirements

Extended Producer Responsibility (EPR) regulations place the burden of product disposal and recycling on manufacturers, encouraging them to design products with their end-of-life in mind. EPR policies are becoming increasingly common in sectors like packaging, electronics, and textiles. These regulations require businesses to track the recyclability and environmental impact of their products throughout their lifecycle.

DPPs play a critical role in helping businesses comply with EPR regulations by providing clear, easily accessible data on a product’s materials and end-of-life options. This data helps companies demonstrate compliance with recycling and waste disposal obligations, avoid penalties, and show that they are taking responsibility for the products they place in the market.

For example, in the European Union, the Waste Framework Directive and various national EPR schemes mandate that businesses report on the recyclability and proper disposal of their products. A DPP can help companies provide the necessary data to regulators, ensuring that they meet the specific requirements for packaging waste management.

2.    Comply with key EU sustainability regulations

As the EU continues to introduce other requirements for product sustainability in order to cut back on emissions, DPPs can streamline the reporting process by centralising and automating the tracking of environmental compliance for various mandatory EU regulations.

The Ecodesign for Sustainable Products Regulation (ESPR)  mandates that all products in scope must come with a DPP accessible by a unique identifier, such as a QR code. The ESPR sets standards for the environmental performance of products throughout their lifecycle, focusing on energy efficiency, material recyclability, and the reduction of hazardous substances.

DPPs also support the Carbon Border Adjustment Mechanism (CBAM) by providing accurate, verifiable product origin, emissions, and lifecycle data for custom declarations. Customs authorities can access DPPs to validate product information and carbon footprint calculations.

The EU Battery Regulation is yet another comprehensive legislation that requires the creation of a digital battery passport for battery categories in scope. It applies to all batteries sold in the EU market, covering various types including portable, industrial, electric vehicle, and light means of transport batteries.

Penalties for non-compliance with producing a digital product passport (DPP) include fines, market exclusion, exclusion from public procurement, compliance orders, civil liability, and even criminal charges.

3.    Supporting plastic tax regulations

As governments impose taxes on non-recycled plastic, businesses are under increasing pressure to prove that the plastic used in their products and packaging is recyclable or made from recycled materials. Failure to meet these standards results in the payment of additional taxes or penalties.

DPPs can help businesses track the recycled content in their products, ensuring that they comply with the envisaged requirements, by offering a detailed digital record of the materials used. Beyond ensuring compliance, companies that can verify their use of recycled materials stand to benefit financially — either by reducing their tax burden or qualifying for exemptions under schemes like the EU’s Plastic Packaging Levy. In addition, DPPs can facilitate the reporting required under national or regional plastic tax laws, streamlining compliance with differing requirements.

4.    Comply with the conflict-free sourcing regulations

Many countries, including the United States, have introduced regulations that require businesses to prove that the materials they use in their products do not come from conflict zones or involve child labour. Notable examples are the Dodd-Frank Wall Street Reform and Consumer Protection Act in the U.S., which requires companies to disclose whether their products contain conflict minerals sourced from the Democratic Republic of Congo and neighbouring countries. Additionally, the Uyghur Forced Labor Prevention Act (UFLPA) requires companies to provide evidence that their goods are not produced with forced labour, particularly in the Xinjiang Uyghur Autonomous Region (XUAR).

A digital product passport (DPP) streamlines audits by providing verified data on raw material sourcing, production, and shipping. It enables robust supply chain tracing, helping companies demonstrate due diligence and compliance with transparency laws. This is key to avoiding penalties like detention, exclusion, or seizure of goods.

5.    Adhere to waste and recycling reporting regulations

Many countries require companies to report on their waste and recycling efforts. For example, the United Kingdom’s Waste Electrical and Electronic Equipment (WEEE) regulations mandate that manufacturers and importers of electrical and electronic products report on the volume of waste they generate and ensure the proper recycling and disposal of their products.

A DPP helps businesses comply with these regulations, enabling an accurate data report to regulatory bodies, ensuring compliance and avoiding fines.

6.    Support sustainability and green finance reporting

As businesses increasingly prioritise sustainability, many are choosing to disclose their environmental impact through frameworks such as the Global Reporting Initiative (GRI) and the Task Force on Climate-related Financial Disclosures (TCFD). These frameworks request companies to report on everything from carbon emissions and resource use to waste management and the sustainability of their supply chains.

By using a DPP to document key sustainability metrics, businesses can ensure they are accurately reporting their environmental performance, meeting the expectations of investors and stakeholders, and securing access to green finance initiatives or sustainability-driven funding.

7.    Track compliance with chemical regulations

As more countries adopt the Global Harmonised System (GHS) for classifying and labelling chemicals to ensure the safe use and disposal of hazardous materials, businesses that manufacture, import, or distribute chemical products must comply with these regulations, providing clear and accurate information on the chemicals used in their products. This includes any companies selling their products in the EU and their supply chain participants.

DPPs can help businesses comply with GHS, the Restriction of Hazardous Substances (RoHs) directive, and other chemical safety regulations by providing detailed information on the chemical composition of products. This includes safety data, handling instructions, and disposal guidelines.

8.    Facilitate compliance with global product safety regulations

Different regions and markets have unique product safety regulations. For example, the U.S. Consumer Product Safety Commission (CPSC) has stringent requirements for the safety of consumer products, while China has its own set of product safety standards. DPPs support compliance with these diverse regulations by offering a centralised and standardised platform for documenting product safety information, certifications, and testing results.

By integrating product safety data into a DPP, businesses can more easily ensure that their products meet safety standards and pass regulatory inspections, no matter where they are sold.

Conclusion

As regulatory requirements surrounding sustainability, recycling, and product safety become more stringent, companies must invest in traceability solutions to ensure compliance. By providing a trustworthy and easily accessible record of a product’s lifecycle — from raw materials to disposal — digital product passports (DPPs) enable businesses to track compliance with various mandatory and voluntary requirements that support the goal of reduced emissions and greater sustainability.

Digital product passports are more than just a tool for regulatory compliance; they are also a critical enabler of transparency, trust, and innovation in the supply chain. As more countries adopt regulations that require businesses to document and report on their environmental impact, DPPs will become an essential part of meeting these obligations and driving the transition towards a more sustainable, circular economy.