Why digital product passports are the gateway to circularity

Jake Hanover
24 June, 24

There’s a product sustainability shake-up bubbling away with too few businesses manning the pan.

The European Parliament has approved new rules to make products sold in the EU more reusable, repairable, upgradeable, and recyclable. These newregulations will make the use of Digital Product Passports (DPPs) mandatory within the EU market for textiles as soon as 2027, followed by other industries before 2030. While these kinds of developments can be viewed by some as burdens or barriers to growth and innovation, the incoming DPP regulation signifies an exciting shift from linear to circular business models and towards international sustainability standards.

Ultimately, embedding sustainability into the digital DNA of products will pave the way for a more transparent, accountable, and circular economy.

DPPs are a vital part of the European Commission’s Circular Economy Action Plan, facilitating a process and tool for recording information on how products are sourced, manufactured, sold, re-used, and recycled within Europe going forward. At its core, a DPP consists of a unique product identifier connected to a data carrier (like a QR code) that helps connect consumers to sustainability information that may include raw material composition, production methods, care instructions, recycling potential, and other important data. It helps consumers compare products based on sustainability attributes enabling them to make informed and conscious choices, as well as driving transparency across supply chains.

The introduction of DPPs in the fashion industry could bring positive change to a sector often associated with a lack of transparency, particularly in terms of sustainability. Avery Dennison’s atma.io has been an Associate Member of the CIRPASS consortium. This includes CIRPASS 1, which advised the consortium on the DPP IT infrastructure and CIRPASS 2, which will create standards-based DPP prototypes. We are about to embark on stage two of this initiative, working in partnership with organizations such as circular.fashion to bring DPP to life.

One of the most exciting aspects of DPPs in the fashion sector is their ability to support circularity initiatives like resale and garment-to-garment recycling. Once you have a digital label on a garment, it’s possible to identify the unique characteristics of that specific item. Benefits include empowering consumers with information on where they can get an item recycled in the right way, while also helping the recycler know the fiber content and what they can expect out of it. Swijin, a sustainable performance wear brand, has integrated Avery Dennison’s Digital Care Labels, powered by our atma.io connected product cloud into its SwimRunner collection. By scanning the QR code with a smartphone, and landing on a custom-built experience, consumers can learn about their garment’s history, its sustainability story, guidance on how to care for the product as well as the best way to dispose of it after use.

The shift to new ownership models, including rental and resale, could also be enabled with the DPPs that will provide identification and authentication of products making resale possible, while at the same time tackling significant industry pain points, such as counterfeiting. A great example of this in action is the adidas Infinite Play program, which includes tagging each individual adidas product with a data carrier which is then linked to its digital ID, helping to scale the brand’s ability to buy-back products and give them a second life.

While legislation might be the driving force behind change, there is also growing consumer demand that shouldn’t be ignored. Avery Dennison commissioned research that shows 43% of global fashion shoppers think transparency about a product’s journey is important. However, transparency is not just a trend of consumer expectation – it is also a powerful tool for businesses to streamline their supply chains to minimize waste and reduce overproduction. Not only does this have a positive impact on the environmental footprint but it also brings greater efficiency to internal processes, which in turn improves the bottom line.

One of the most important levers that the fashion industry can pull to reduce its environmental impact is closed-loop recycling. Europe generates seven million tons of textile waste each year, yet only 35% of this waste is separately collected, and less than 1% is recycled into new materials. We’ve recently partnered with TEXAID to address these challenges and are exploring how digital identification solutions that carry vital fiber information can help process apparel into relevant resale or recycling streams.

Although still a relatively new concept, businesses need to prepare for the reality of DPPs. Naturally, some of the details in the legislation are yet to be defined, such as which data points will have to be reported in the DPP. These are due to be announced by 2025. At the same time, there is a clear direction of travel towards an ambitious set of data points, as indicated in the draft JRC Science for Policy report.

Making DPPs work for your business requires wholesale organizational change that might take many years, so it’s important to start integrating the tools and technology into your business and your supply chain now. Not only are DPPs better for the environment, they increase the transparency of sustainability information, helping stakeholders across all parts of the value chain do their part to ensure responsible production and circular economy solutions for a more sustainable world.

So as the heat rises and 2027 nears, the clock is ticking for businesses to ensure their readiness. Now is the time to embrace the incoming DPP initiative and a more circular business world.

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