DPP: EU legislation impacting Australian retailers
Have you ever heard of the acronym DPP before? It stands for Digital Product Passport and if this is completely new for you, it’s time to get familiar with it, because it’s a term you’ll hear a lot more over the next few years.
Avery Dennison, a member of the CIRPASS consortium, a network of leading organizations defining the technological architecture for the DPP, can provide you with everything you need to know about DPP and how you can prepare for it.
What is DPP and why should you be aware of it?
The Digital Product Passport initiative is part of the Ecodesign for Sustainable Products Regulation (ESPR) and one of the key actions under the EU’s Circular Economy Action Plan (CEAP).
The European Commission's Digital Product Passport scheme will gather data on a product and its supply chain. This will allow all stakeholders – including consumers – a better understanding of the product’s provenance, the materials it contains, and its environmental impact.
If it’s an EU regulation, why should Australian businesses be worried about it?
Regardless of whether you’re an European Union-based corporation or not, any businesses selling or distributing in the European market will be subject to this new legislation. Digital Product Passports for the first product groups (textiles, construction, industrial and electric vehicle batteries) are expected to come into effect, indicatively, as of 2026-2027.
What does this really mean for Australian retailers?
DPP is designed to support a circular economy. Sustainable product development, service and repair-based business models, informed consumer purchasing decisions and compliance regulations are all part of this legislation’s goals.
“The whole purpose of DPP is to consider the entire life cycle of products, from production to end-of-life disposal. This must cover all processes relating to material sourcing, production, and supply chain.” says Lindsey Hermes, Global Commercial Director of Digital Solutions at Avery Dennison.
To achieve this, businesses will need to invest in technology that allows them to permanently tag each product with a unique digital log, connected to a product cloud, to store, harmonize and translate the data.
DPP can assist buyers in obtaining the information they seek and make informed purchasing decisions.
A recent study, “The Missing Billions: the real cost of supply chain waste”, concluded that consumers ranked "increased transparency regarding materials and ingredients" as the top way brands can help consumers make more sustainable purchases around apparel, beauty and food. In another recent study about Digital Consumer Behavior, almost one third of consumers say they would be willing to scan a digital trigger on a garment to learn more about product journey traceability. The desire for more transparency and traceability is real, and DPP can help businesses achieve it.
"Transparency also provides brands with the opportunity to differentiate their offering and validate their progress against sustainability goals by engaging with their customers via smartphones at the point of sale and even post-purchase", says Hermes.
However, offering consumers transparency is not the only benefit. When a trigger, applications, and platform are implemented, it allows businesses to unlock additional value that can enhance efficiencies, drive sales, and build brand loyalty.
How to make the DPP transition as smooth as possible?
The implementation of the DPP will take time, but if you start planning now, you can do it successfully. Choosing someone inside your organization who can lead the initiative and align all the internal resources such as supply chain, marketing, procurement and operations will be key.
External partnerships will be as important as internal alignment. For example, re-use of materials is an important topic for DPP, therefore being close to entities like recycling bodies or retailers that already offer a second life to garments can be highly beneficial.
Finally, one of the key factors is data visibility. Lindsey Hermes predicts that the digital ID technology will likely involve QR codes. She warns that many companies may find the key information they need for the scheme siloed and fragmented. "Getting the structure of this data consistent and adhering to global standards is crucial, and bringing in technology providers to enable that is a vital part of the partnership structure," she says.
EU institutions and the CIRPASS consortium are still actively working on the topic and we’re expecting further guidance within the next few months, but for now, addressing the challenges outlined above is key and there is no time to waste. In the meantime, if you need any information, feel free to contact our team of experts.