The Digital Product Passport represents a defining moment in the evolution of product compliance and sustainability regulation

By Athina Evagorou

As global markets continue to evolve towards greater transparency and sustainability, the European Union’s introduction of the Digital Product Passport marks a pivotal shift in how product information is collected, shared and regulated. Designed to underpin the EU’s transition to a circular economy, the digital passport creates a unified digital record of a product’s lifecycle from material to end-of-life disposal.

The initiative responds to growing consumer demand for visibility into product origins and environmental impacts while aligning with the EU’s broader climate goals and the environmental, social and governance (ESG) principles. Embedded within the Ecodesign for Sustainable Products Regulation (ESPR), the digital passport is poised to become a benchmark for product traceability and sustainability compliance, extending its influence beyond EU borders.

The Framework

Under the ESPR, the majority of physical products will be required to have a digital passport unless an equivalent digital system provides comparable information. The initiative introduces a technological mechanism for information exchange and a regulatory framework that mandates traceability and transparency throughout the product value chain.

The European Commission is currently leading the way towards a standardisation process to define technical and procedural requirements for the digital passport, for various product categories.

The information to be contained in each passport will be determined through product-specific delegated acts, setting out amongst others, relevant ESG data for each category and the level of detail required. The European Commission is expected to perform impact assessments which will weigh the environmental benefits of data collection against potential costs, including the digital infrastructure required to host and manage product information.

The digital passport will be introduced progressively, beginning with product categories that present significant environmental impact or traceability challenges such as batteries, electronics, textiles and clothing. Future expansion is expected to encompass construction materials, packaging and raw materials.

The measure will function as a comprehensive digital passport for each product, storing structured data on its composition, manufacturing origin, environmental footprint and recyclability.

Each passport will be linked to a unique digital identifier, accessible via a scannable code or embedded link such as QR codes, barcodes and NFC tags.

Throughout a product’s lifecycle, the passport must remain updated and accessible in a standardised format. This continuity of data ensures traceability that will allow regulators, businesses and consumers to make better-informed decisions regarding sustainability and compliance.

For consumers, it will offer immediate access to reliable information about a product’s environmental impact, repairability and recyclability.

For businesses, it will provide a powerful tool for supply chain management, risk mitigation and regulatory compliance.

Imported products must also comply with digital passport requirements. Equally, online marketplaces will be subject to obligations, including making digital passports accessible to EU consumers and providing market surveillance authorities with access to product data to verify compliance.

Given the interconnected nature of global supply chains, non-EU manufacturers and suppliers will be indirectly affected. In order to maintain market access, these entities must provide the necessary data to accurately complete a digital product passport, aligning with the EU’s broader aim to embed sustainability standards across global trade networks.

Benefits and Opportunities

The integration of ESG and other metrics into a harmonised reporting framework through the digital passport operationalises the concept of sustainability due diligence, bridging data gaps between corporate sustainability reporting and product-level transparency.

The digital product passport will offer multiple advantages for businesses and consumers:

By providing verifiable information on material composition, sourcing and environmental performance, they improve transparency and accountability. Businesses will on one hand face greater scrutiny but on the other will gain an opportunity to demonstrate genuine sustainability leadership through credible data-driven reporting.

Comprehensive traceability enables products to be repaired, reused or recycled more efficiently. By documenting materials and components, they will facilitate circular economy practices and extend product lifecycles.

They will serve as dynamic compliance records, simplifying audits and legal verifications.

Early adopters may benefit from gaining market share by aligning with upcoming EU standards ahead of formal enforcement.

The harmonisation of product data can reduce administrative burdens, enhance interoperability between systems and generate long-term cost savings. Reliable digital data create an opportunity for companies to identify risks, improve policies and improve their systems well beyond the ESG objectives.

Challenges and Considerations

While the benefits are significant, implementation of the framework presents practical and legal challenges:

Gathering comprehensive data across multi-layered global supply chains is complex and resource-intensive. Small and medium-sized enterprises may face difficulties in developing compatible data systems or integrating the data accumulated from various sources.

Companies will need to adopt robust data governance frameworks, setting clear rules on data ownership, access rights, confidentiality and accuracy.

Given the sensitivity of commercial information, ensuring cybersecurity and data protection is paramount.

Initial implementation costs may be significant, encompassing digital infrastructure, compliance mechanisms and workforce training.

Conclusion

The Digital Product Passport represents a defining moment in the evolution of product compliance and sustainability regulation. It bridges the gap between consumer expectations, corporate accountability and regulatory oversight. While challenges in data management, governance and implementation are expected, the long-term potential to enhance transparency, circularity and trust across global value chains is undeniable.

Developing robust data infrastructures will position companies at the forefront of a more sustainable and transparent global marketplace.

For businesses, preparation will be essential; from legal and regulatory advice to data collection and credibility.

For consumers, it will be an opportunity to scrutinise the product options available and evolve their buying habits according to sustainability criteria.

The data that will be generated and become available in a standardized format may be utilized as the foundation for the evaluation of consumer trends, market gaps, business opportunities and the prioritisation of ESG factors. 

Athina Evagorou is Associate lawyer of Paphos office. Elias Neocleous & Co LLC