The Digital Product Passport – Transparent and Sustainable Supply Chains Powered by Blockchain

Finboot Team
October 25, 2022

The Digital Product Passport – Transparent and Sustainable Supply Chains Powered by Blockchain 

The Circular Economy Action Plan constitutes the Sustainable Products Initiative, which aims to implement a digital product passport. The passport is meant to facilitate supply chain traceability by collecting data about the value chain of the products.

The digital product passport (DPP) will bolster sustainability by ensuring products are manufactured with renewable energy and are devoid of hazardous chemicals. This passport will also facilitate a circular economy, simplifying the process to recycle products when they reach the end of their lifecycle.

Powered by blockchain technology, the digital product passport enhances transparency and ensures traceability across the supply chain. Let's delve into the dynamics of how digital product passports function.

What is a Digital Product Passport?

A digital product passport is a comprehensive digital record that captures a product's value chain, documenting its journey from raw materials to the final product. It includes details on the energy used, emissions generated, and strategies for waste reduction.

The data within a digital product passport is securely stored on a blockchain, ensuring data security and providing a transparent, tamper-proof method for sharing information. This passport can authenticate a product's sustainability and confirm its compliance with environmental and social standards.

Why Should We Start Using Digital Product Passports?

By monitoring a product's complete lifecycle, from manufacturing to disposal, digital product passports offer a more thorough insight into the environmental impact and social implications of products, underscoring the importance of sustainability.

1. Increased Transparency for both Consumers and Businesses

At the moment, there's rampant mislabeling and de-facto greenwashing in the marketplace. It happens when companies make claims about their products that are not accurate or they downplay the environmental impacts of their product.

Digital product passports would enhance transparency, obliging businesses to disclose precise information and empowering consumers with easy access to this data to make informed choices.

2. Improved Sustainable Practices in a Product's Lifestyle

Furthermore, digital product passports would advance product recycling and waste reduction. By tracking products through their entire lifecycle, we can pinpoint opportunities to recycle or repurpose them, thereby promoting sustainability and ecodesign.

● Carbon Footprint: With an average carbon footprint of 13 tonnes of CO2-e per person, the UK is one of the worst offenders when it comes to greenhouse gas emissions, significantly contributing to the environmental impact. Moreover, the EU produces a substantial amount of emissions, further highlighting the need for measures to reduce the carbon footprint and mitigate greenhouse gas emissions.2.5 billion tonnes of waste annually. A digital product passport would help businesses and consumers understand the carbon footprint of a product and make better choices about their purchases. Consumers can learn how much of the product they're using contains recycled material, allowing them to calculate their environmental impact.

● Water Footprint: By understanding the water footprint of a product, it will be possible to quantify one's environmental impact more accurately. A product with a large water footprint might be made with an excessive amount of cotton. To offset the environmental impact of this product, the consumer might choose to purchase products made with recycled materials, thereby promoting sustainability.

● Material Grades: With greater access to information about raw materials, it will be easier to improve the quality of recyclable materials within sustainable supply chains. Moreover, it might be possible to choose products made with certified sustainable products, ensuring that the materials used are in line with environmental standards.

3. Boost the Circular Economy

Digital Product Passports (DPPs) would also contribute to the development of a circular economy, in which waste is designed out of the system, and products are made to be reused, repaired, or recycled back into the manufacturing process. This approach to sustainability emphasizes the importance of the recycle and reuse principles in achieving a circular economy.

Digital Product Passports (DPPs) enable businesses to track their products throughout the entire lifecycle, fostering sustainable supply chains. It would allow businesses to identify opportunities to close the loop and keep materials in use for as long as possible within a circular economy, and more importantly, it would allow businesses to sell products as a service rather than as physical objects.

The benefits of a circular economy are numerous, and digital product passports would be a key step in implementing it. For instance, a report shows that a circular economy will create up to 700,000 jobs in the EU by 2030.

4. Centralised Information Flow

Digital Product Passports (DPPs) provide a centralised platform for all of the information, enhancing transparency. By mandating that businesses report certain information about their products, it will be simpler for the end-users to make informed decisions about their purchases and recycling habits.

Moreover, the use of Digital Product Passports (DPPs) will allow businesses to share data about their products with each other and develop new ways to improve the efficiency of the manufacturing process, thereby optimizing operations and fostering collaboration.

Why Use Blockchain for Digital Product Passports?

Blockchain technology, a form of digital ledger technology (DLT), is revolutionizing how transactions are recorded and shared across a network of computers. Utilizing blockchain, companies can create digital product passports that offer a secure and tamper-proof method to trace a product's lifecycle from its origin to the consumer and ultimately to its end of life.

Blockchain technology holds vast potential for the food industry, enhancing supply chain transparency, bolstering food safety, and improving quality control. These compelling reasons underscore the value of integrating blockchain into supply chain management and the broader application of digital product passports.

● Supply Chain Traceability

● Reduces Compliance Costs

● Accelerate Data Transfer Processing

Blockchain technology is becoming increasingly relevant in various industries, including the food, fashion, and automotive sectors, which all depend on the efficient sharing of product information. In these fields, blockchain can significantly speed up data transfer and streamline processing.

As blockchain technology uses cryptographic techniques, it would be very difficult for anyone to tamper with the data stored on the blockchain. Thus, it will help ensure the accuracy and integrity of product information - in short it provides immutable truth.

Final Words

A digital product passport provides numerous advantages, such as bolstering supply chain sustainability, informing consumers about the sustainability claims of products, and facilitating ethical consumption by shedding light on environmental and social impacts.

Although digital product passports are in the early stages of development, there are ongoing initiatives aimed at leveraging them for greater supply chain transparency. As DLT blockchain technology continues to advance, the adoption of digital product passports is expected to expand.

Digital product passports are poised to be particularly useful in the fashion, food, and electronics sectors, where they can empower consumers with the necessary information to make informed choices about their purchases.

Create your own
Battery Passport