But beware compliant software scams, businesses warned.
Across Europe, a quiet but important shift is underway in how products are regulated and tracked.
The European Union is preparing to introduce the Digital Product Passport (DPP) – a tool designed to bring transparency and traceability into the heart of supply chains.
While the final legislation has still to be settled, the direction of travel is clear: businesses will be expected to collect and share far more detailed information about the products they make, move and sell.
But what is the DPP and what should UK and other non-EU suppliers and distributors be thinking about now?
What is the Digital Product Passport?
Introduced by the EU’s Ecodesign for Sustainable Products Regulation, a DPP is a digital identity card linked to physical products, components and materials that are going to be placed on the EU market.
A DPP will contain essential information about a product to support its sustainability and circularity. The thinking is that information will be accessible quickly and easily electronically, making it easier for consumers to better understand a product and its supply chain.
Consumers will be able to access information such as the origin, environmental impact and recyclability of a particular product.
Current position
While the ESPR creates a legal framework for the DPP, further information will be introduced through EU delegated act regulations, the first of which is likely to be adopted in late 2025 / 2026.
This will be followed by an implementation period of approximately 18 months before the delegated act comes into effect. So, while DPPs will be required and fully in use by 2027 / 2028, it is important that businesses start now to think about their supply chain contracts.
Looking ahead to this implementation, the EU Commission has created the Ecodesign Forum as well as publishing and adopting the ESPR Working Plan for the period 2025 - 2030 (Working Plan).
The Working Plan is noteworthy as it sets out the first categories of products to be subject to DPP implementation (and ecodesign requirements). As well as mattresses, these categories include a range of products from apparel to aluminium.
The Ecodesign Forum will then develop this Working Plan further to assist in the implementation of the ESPR, DPPs, and any ecodesign requirements.
Can DPPs be created now?
Short answer: no. The requirements are still being defined and as yet there is no concrete, definitive list as to exactly what information will need to be collated for a DPP - although there have been suggestions.
Therefore, while it is possible to start collating the data that is likely to be required, any DPP that is created now will probably need to be updated and amended once the applicable delegated act comes into effect.
So, while many companies are offering services related to DPPs, it is important to be mindful that this area is yet to be solidified and that any DPP created is unlikely be the final product.
Further where a contract has already been entered into to be provided with a “proven solution to ensure compliance” whether it is possible to exit that contract will depend on what the provider represented that it was providing and the terms of the contract entered into.
In some cases, this will mean that the contract cannot be exited. In other cases, there may have been a misrepresentation which may allow a termination to be achieved.
Implications
So, what does this mean in practice? Well, when the implementation period comes into effect, the new requirements will have an impact on supply chain contracts in general.
Suppliers and distributors – and others upstream and downstream the supply chain - will need to share product data for the DPPs, and this data will need to be in a standardised format.
Supply chain contracts will also need to address:
- the concept of the DPP;
- the data to be provided;
- the format of the data; and
- most importantly liability for any inaccurate or insufficient information provided and the consequences where there is a failure to meet the DPP requirements.
Whilst some existing supply chain contracts may contain contractual obligations for the provision of the requisite information – and the consequences for failure to do so – many such contracts will not do so. As such, suppliers and distributors need to be thinking now about what changes – at their most basic contractual information and remedy provisions - are likely to be needed to their contracts.
Suppliers and distributors should also recognise that the inclusion of such provisions may lead to the renegotiation of their contracts altogether.
Furthermore, the implementation of DPPs will require a substantial digital framework to be in place to support this new concept, which in itself will place a further procedural burden on suppliers and distributors.
Conclusion
So, is all this worth it? In essence, yes. These developments should support greater supply chain integrity and transparency which would justify any procedural burden in the long run.
In addition to this, product lifespans should be longer with increased recycling capabilities, all due to the additional information that is available regarding the material composition, substances of concern, recycling and repairability of products.
ABOUT THE AUTHORS
Stephen Sidkin is a partner and Sophia Digby is a trainee solicitor at Fox Williams LLP (www.distributorlaw.co.uk; www.sustainabilitylaw.co.uk; www.foxwilliams.com)
