Policies that require supply chain transparency and traceability are taking shape all over the world, and new regulations that will require many companies to use Digital Product Passport (DPP) technology to share product information are on the horizon.
The DPP is a tool that creates transparency by providing product data on raw material extraction, production, recycling, and ultimately the social, environmental, and economic impacts of these processes. Those insights will lead to the optimisation of the value chain. It will also bring nations and companies closer to sustainable development goals of reducing their environmental impact and transitioning to a more sustainable economy.
The success of implementing DPPs hinges significantly on collaboration. Toward that end, a growing movement of self-organised, private companies and organisations are taking early action to influence and help shape regulation, outline DPP frameworks tailored to the needs of specific industries and value chains, and find ways to fill the gaps in the current availability of data.
What businesses, governments, and individuals that make up these alliances have in common is the need to share data with each other, without having to give up control of that data. Their common goal is to create a more open and collaborative data ecosystem in Europe. This article features the two largest digital infrastructure and data ecosystem initiatives, followed by examples of large-scale alliances developing such frameworks across the key industries facing DPP regulation in Europe.
Digital Infrastructure and Data Ecosystems for DPPs
GAIA-X: A new system for global data sharing
GAIA-X is an ambitious initiative that is made up of an association of governments, technology firms, academics, public bodies and not-for-profits that is developing a federated data structure for the digital economy. It seeks to define a common way to solve Europe’s digital sovereignty issues. The European Commission has provided funding and is involved in GAIA-X’s development.
It has the potential to usher in a new system of sharing data globally and help to create a more open and collaborative data ecosystem while upholding EU data privacy laws pertaining to:
- Data sovereignty: Data should be stored and processed in Europe, in accordance with European law.
- Transparency: Individuals should have control over their data and should be able to understand how their data is being used.
- Openness: GAIA-X will be an open platform for connection and participation among stakeholders, including businesses, governments, and individuals.
- Security: Data should be protected from unauthorised access and misuse. GAIA-X will be built on top of European privacy and security laws, ensuring that your data is safe and secure.
- Interoperability: GAIA-X should be interoperable with other data infrastructures, both in Europe and in other parts of the world.
- Trustworthiness: GAIA-X will be governed by a set of principles that ensure that it is a trustworthy platform for sharing data.
The impact and applications of GAIA-X
With nearly 400 members, these traits give GAIA-X the potential to play a major role in the development and adoption of DPPs across Europe for a wide variety of industries. For example, it can share data about energy production and consumption to improve the efficiency and security of the energy grid, or to secure data about patients and their medical records can help to improve the quality of healthcare and reduce costs. GAIA-X can also be used to store and share data about production processes, which can help to improve efficiency and quality in manufacturing.
A car manufacturer could use GAIA-X’s structure to create a DPP that would contain information about the car's components, materials, and manufacturing process. The manufacturer’s suppliers, customers, and regulators involved in the car's life cycle would then all have access to the same information about the car, which would help to improve the transparency and traceability of the car's supply chain.
GAIA-X is a complex, cross-border initiative, seeking consensus among the public and private sectors across Europe. It is tackling the challenging technical aspects of developing new standards and technologies. As a political initiative, it involves the balancing of different interests, such as the need for security and privacy with the need for innovation and economic growth. Culturally, it involves changing the way that people think about data sharing and collaboration.
While it is not a legal entity, GAIA-X must comply with a wide range of legal and regulatory requirements, both in Europe (grounded in GDPR, the NIS Directive, and the EU Data Strategy) and in other parts of the world, since it is meanwhile opening North American and African Data Hubs.
How to get involved in GAIA-X
To get involved, companies can join as members to contribute to the development and implementation of the GAIA-X infrastructure. As a member, you can participate in workgroups, contribute knowledge, and apply GAIA-X standards in your own digital infrastructure.
International Data Spaces Association (IDSA): Facilitating secure and standardised data exchange
A central element of the GAIA-X architecture is the International Data Spaces (IDS) standard. It enables open, transparent, and self-determined data exchange. IDSA is a European initiative to facilitate a secure and standardised space where companies can share and trade data. In relation to DPPs, here's how IDSA can contribute:
- Secure Data Exchange: IDSA can provide the framework for a secure, standardised exchange of data across multiple organizations. This is crucial for DPP as secure, reliable data from various stakeholders is required throughout a product's lifecycle.
- Data Sovereignty: IDSA demands that control of the data remain with the data owner, which complies with the EU's stand on data sovereignty. This means each stakeholder providing data for DPP maintains control of their data.
- Standardisation: IDSA can help establish standards for data exchange and interoperability. As DPPs will involve a plethora of products across various industries, IDSA's work in standardization can promote consistency and uniformity in how DPPs are created and used.
- Supporting the use case: IDSA, together with OPEN DEI (another EU project), is running a series of workshops focusing on use cases, including one for DPP. These workshops bring together various stakeholders, for example, from manufacturing, logistics, and IT domains, to discuss and develop potential use cases for IDS and DPP. In essence, IDSA's ambition to create a trusted data framework directly supports the principles of trust, security, and interoperability that underpin the concept of a Digital Product Passport.
How to get involved in IDSA
Companies can become members of IDSA. As a member, they have the opportunity to contribute to the design of the International Data Spaces and implement the developed IDS standards in their own company.
Industry-specific DPP solutions
Catena-X: Developing a DPP framework for the automotive industry
Gaia-X’s first implementation project is Catena-X3, a German consortium of automotive companies, suppliers, and technology providers that is developing a DPP framework for the automotive industry. With more than 60 partners, Catena-X's DPP framework is designed to provide a secure and reliable way to share data about vehicles and their hardware and software components along the entire automotive value chain.
To give an idea of the scale and complexity of the automotive industry, Catena-X, along with Dun & Bradstreet, analysed the global market in detail by identifying 28,654 companies at 934,625 locations worldwide in a 2023 white paper.4
How DPPs enhance traceability in the automotive industry
The automotive industry is resource-intensive and produces a significant amount of waste. DPPs can help to improve their efficiency and sustainability by tracking the environmental impact of vehicles throughout their lifecycle.
For example, if a vehicle part needs to be recalled, DPPs can be used to quickly identify all of the vehicles that have that part and ensure that they are all repaired or replaced. The enhanced traceability DPPs provide can also help to reduce vehicle theft and counterfeiting.
How to get involved in Catena-X
Companies of any size can join the Catena-X network and benefit from end-to-end traceability. The minimum requirements are the availability of parts list information and a rudimentary IT infrastructure with internet access. Businesses in the automotive industry can join Catena-X as network partners to collaborate on creating an open ecosystem for secure data exchange and contribute to the joint goal of complete traceability in the production and lifecycle of automobiles.
Global Battery Alliance (GBA): Towards sustainable battery value chains
The rapidly growing batteries industry is at the forefront of DPP implementation.
Electric vehicles provide hope as exhaust emissions account for about 75% of the total emissions attributed to mobility globally.5 As such the entire lithium-ion battery chain — from mining to recycling — could grow by 30% each year.6 Meanwhile, batteries for EVs and other products need to be safer and more efficient to produce.
Made up of makers of cars and batteries, energy companies, miners, civil society advocates, researchers, and the public sector, the GBA launched the world’s first proof-of-concept pilot series for a Battery Passport at the annual World Economic Forum gathering in Davos. The Passport is a framework that establishes a digital twin of a physical battery, conveying information about sustainability and lifecycle requirements.
Impact of new regulation on the battery industry
This is why the adoption of the Battery Regulation by the European Parliament in June 2023 has had a profound impact on the battery industry in Europe and beyond. The law’s passing marked a milestone: It was the first time a DPP was integrated into a piece of legislation.
The regulation will enable tracking and tracing of batteries, provide information about the carbon intensity of their manufacturing processes, the origin of the materials used, and whether renewable material is used. There will be data on the composition of batteries, including raw materials and hazardous chemicals. This promises more data to improve the treatment, recycling, and recovery processes at the end of a battery’s lifetime.
Get involved in the GBA as affiliated initiatives
A critical step towards establishing global, sustainable battery value chains that will one day lessen greenhouse gas emissions is to attain traceability from material sourcing through its entire life cycle batteries. Email GBA to become an affiliated initiative. The far-reaching alliance consists of several interconnected working groups7 and seeks affiliated initiatives in:
- Battery ID
- Greenhouse Gas
- Child Labour and Human Rights
- Track and trace
Batteries European Partnership Association (BEPA)
Another important private/public working group is the Batteries European Partnership Association (BEPA). The non-profit organisation represents the battery value chain in Europe and promotes the development and use of DPPs for batteries as a way to improve the sustainability of the battery industry. They gather more than 140 stakeholders of the European battery community who strive towards a competitive European industrial battery value chain for stationary applications and e-mobility.
BEPA is working on a number of initiatives to enable DPPs for batteries:
- Developing a common data model for DPPs for batteries. This data model will ensure that DPPs for batteries contain the same information, making it easier for businesses and organisations to share and use this information.
- A new certification scheme will ensure that DPPs for batteries meet certain standards of quality and accuracy.
- Encouraging the use of DPPs for batteries among businesses and organisations while raising awareness of the benefits of DPPs for batteries.
Working with the European Commission and other stakeholders to develop a regulatory framework for DPPs for batteries, BEPA has partnered with the European Telecommunications Standards Institute (ETSI) to develop a set of standards for DPPs for batteries. It is also providing training and support to businesses and organisations on how to use DPPs for batteries.
Both GBA and BEPA strive to improve the sustainability of the battery industry. Improving the traceability of batteries will make it easier to track their environmental impact throughout their lifecycle. Promoting the reuse and recycling of batteries will help to reduce the amount of waste generated by the battery industry. Encouraging the use of more sustainable battery materials can increase the efficiency of the battery supply chain, reducing the environmental impact of battery production.
How to get involved in BEPA
Acquiring insights into industrial R&I and European research gives the opportunity to influence and contribute to battery research. Facilitate deeper understanding of the value chain, upcoming innovations, technology readiness, and European regulations, while fostering connections within the industry. There are three types of memberships to join BEPA.
Other DPP standardisation efforts
Funded by the European Commission, CIRPASS is a consortium of more than 30 partners to create a clear concept for DPPs and propose prototypes for three key product categories: batteries, electronics, and textiles. Many DPP initiatives have emerged8 as a result, such as Circularise’s supply-chain traceability solution, the GS1 Digital Link, the Product Circularity Data Sheet, the Construction Material Passport, the Digiprime Platform for Circular Economy, just to name a few. Read about Circularise’s involvement in CIRPASS
The 18-month project brought together many of the necessary competencies, such as cybersecurity and semantic web technologies, from circular textiles to vehicle battery management systems.9 It created consensus on the main requirements for the DPP system, investigated DPP-enabled business models, and facilitated a large number of DPP initiatives.
As an example, a DPP framework to track the amount of water, energy, and chemicals that are used to produce a textile, as well as the amount of waste that is generated, can then be used to make more sustainable choices about the production and use of textiles.
The EU consultation with CIRPASS yielded a preliminary proposed list of 20 products to prioritise for the first DPPs. This includes:10
- End-use products: Textiles and footwear, furniture, ceramic products, tires, detergents, mattresses, lubricants, paints and varnishes, cosmetics, toys, fishing nets and gears, absorbent hygiene products
- Intermediary products: Iron and steel, non-ferrous metals, aluminium, chemicals, plastics and polymers, glass, as well as paper, pulp, and boards
CIRPASS 2 is a follow-up project building upon the work of the first to further develop the concept of DPPs. The project is slated to run for three years, from 2023 to 2026, focusing on three priority areas:11
- A common data model for DPPs: The model will ensure that DPPs contain the same information, making it easier for businesses and organisations to share and use this information.
- A certification scheme for DPPs: This certification scheme will ensure that DPPs meet certain standards of quality and accuracy.
- Promoting DPPs: CIRPASS 2 will work to raise awareness of the benefits of DPPs and to encourage businesses and organisations to adopt this technology.
The CIRPASS 2 project is an important step towards the development of a more sustainable circular economy. By improving the transparency and traceability of products, DPPs can help businesses and consumers make more sustainable choices. This can lead to a reduction in the environmental impact of products and more efficient use of resources.
How to get involved in CIRPASS
The CIRPASS consortium published an initial set of information requirements,12 one each for the batteries, electronics, and textiles sectors, to serve as a basis for consultations and discussions. This report is open for feedback until 30 September 2023. To get involved with CIRPASS, organisations can complete a questionnaire on existing concepts, pilots, and initiatives.
Global Standards One (GS1)
Affiliated with the GBA (see above) and other initiatives, GS1 is a long-established organisation developing and maintaining global standards for product barcodes. GS1 is now in the early stages of developing its own DPP framework,13 and with more than 2 million user companies, GS1 has the potential to be a major enabler of the circular economy by providing a common framework for creating and sharing DPP data across borders and industries.
One of its key features is that GS1 DPP is interoperable with other DPP frameworks. This means that DPPs created using GS1 DPP can be shared with companies that are using other DPP frameworks. This includes the EU digital product passport. The framework uses a standardised data model, so any DPP created using the GS1 DPP will contain the same information, regardless of the company that created it.
Facing DPP requirements head-on is a substantial undertaking. This requires tackling data asymmetry, a lack of standardised and common frameworks, and the need for collaborative and circular business models, as well as establishing incentive structures that motivate data sharing.
By investing in emerging technologies like blockchain — along with artificial intelligence (AI) to leverage real-time data insights, automating processes, and optimising overall logistics performance — industries that have complex and opaque supply chains stand to benefit the most from DPPs. The resulting evolution in digital infrastructure will in turn make the most positive economic and environmental impact, especially if they collaborate and prepare now.
All of these initiatives mentioned in this article broadly share a common goal of providing more transparency, circularity, and sustainability in their respective domains. Viewed as the “future information system of the circular economy,” DPPs will be an essential tool to reach the European Union's goals of transitioning to a circular economy on a large scale, achieving carbon neutrality, and reducing the environmental impacts of consumption.
In time, more industries will adopt DPPs and use them to improve the sustainability of their operations. The collaborative approach to developing DPP frameworks through self-organised, private working groups enables companies to spearhead the development of DPP frameworks tailored to their specific industry needs. This lays the groundwork for data and best practice collaboration, and the development of a secure and reliable system.
Circularise is the leading software platform that provides end-to-end traceability for complex industrial supply chains. We offer two traceability solutions: MassBalancer to automate mass balance bookkeeping and Digital Product Passports for end-to-end batch traceability.
Contact us to learn more about our digital product passport solution and how your business can help drive change within your supply chain.