The Digital Product Passport: Enabler of the Circular Economy

In this interview, Alexander Appel, an expert in sustainability and decarbonization, explains how companies can take meaningful action regarding the Digital Product Passport (DPP). One thing is certain: the Digital Product Passport is coming – and faster than many would think.

Alexander Appel has been with MHP for six years. As Manager Sustainability Transformation, he supports companies in their holistic transformation toward sustainability – from strategy and implementation to value creation. His key focus areas include the development of CO₂ strategies, digital CO₂ management, the establishment of circular economy practices, and the analysis of ESG and sustainability data.

He sees the transformation toward sustainability not only as a necessity, but as one of the greatest business opportunities of our time. Combining sustainability with profitability should be the top priority. In preparation for the introduction of the Digital Product Passport from 2027 onward, he discusses the challenges and solutions surrounding one of the central instruments of the new EU Ecodesign Regulation (ESPR).

1. What exactly is behind the Digital Product Passport?

Digital Product Passports are part of a circular economy strategy. Starting in 2027 – initially with the Digital Battery Passport – they are to be gradually introduced across the EU and become mandatory for all companies operating within the EU. The first industries affected will be manufacturers of batteries, electronics, and textiles.

A Digital Product Passport collects and shares information about a product’s manufacturing, use, and disposal, thereby creating the necessary transparency across the entire product lifecycle. At its core, it is a digital dataset. For companies selling products in the EU, data management will therefore become both a mandatory requirement and a decisive competitive factor.

2. Where do companies face the greatest challenges?

The current challenge lies in developing standards that enable companies to make data available effectively both internally and across organizational boundaries. This primarily concerns supply chain data, which is often missing or not available in the correct format. 

The Product Passport exposes gaps where processes have not yet been fully digitized. However, companies that follow a lean and functional operating model can keep the effort required for collecting and aggregating data within reasonable limits.

3. How will the Digital Product Passport change manufacturers’ day-to-day operations?

It forces companies to adopt standardized data management practices. Businesses must consolidate, aggregate, and provide user-centric access to large amounts of data from various source systems.

This includes product information, material master data, material composition details, sustainability data such as CO₂ emissions, recovery and recycling information such as disassembly instructions, repair options, spare parts availability, safety information, and guidance on proper product disposal.

In this way, a holistic view of a product is created – one that is valuable for a wide range of internal and external stakeholders.

4. Who benefits most from the Digital Product Passport?

Companies that start early. Businesses that structure and utilize their data effectively gain not only regulatory certainty, but also efficiency, competitiveness, and greater autonomy.
Our Industry 4.0 Barometer 2026 highlights that the DACH region still has catching up to do in this area. Companies that overcome fragmented IT and OT landscapes, increasing system complexity, and slow modernization cycles are often the ones achieving the next major leap in productivity.

5. What are the right first steps now?

Do not wait for perfect standards – start now. The Product Passport may not be a sprint, but those who start too late risk quickly falling behind and missing a significant economic opportunity: identifying potential within their own value chain, engaging with external stakeholders in entirely new ways, and enabling new business opportunities within the circular economy.

The first steps include gaining clarity on requirements, identifying data sources, defining responsibilities, and launching pilot projects. A seven-step implementation model has proven effective, ideally culminating in the creation of a centralized data platform capable of supporting all regulatory requirements – while making sustainability actively manageable.
With such a structured approach, companies can iterate step by step, unlock business potential, and leverage software solutions that are already available today.