Ready To Engage in the EU DPP Discussion?

The concept of a digital passport is not new.

The digital passport, which has already been implemented in the travel and health sectors, is familiar to many of us. It enabled safe and unrestricted movement within the European Union during the COVID-19 pandemic. Recently, the EU has been exploring the potential of a digital passport. Could the solution solve the transparency problem that exists in the fashion and textile industry?

Digital Passports: A Growing Trend

The EU Digital Product Passport (DPP) is gaining popularity.

This should come as no surprise, because the DPP tool has been designed to promote transparency and facilitate circularity. Its unique selling proposition (USP) is its capability to offer a secure and verifiable digital record of the fashion product's supply chain and origin, from the raw materials to the finished product.

Utilising blockchain technology, the DPP can create a permanent and transparent record of a product's journey through the supply chain. Using QR code or a hardware tag such as NFC, RFID, or Bluetooth, the digital passport allows for the continuous identification and monetisation of apparel products through circular business models such as rental, repair, resale, and recycling.

Now the growing trend, has entered the ‘now or never’ mode for fashion businesses. Why?

Well, in 2020, the European Commission initiated the Circular Economy Action Plan to promote a more sustainable and circular economy within the EU. The plan includes introducing digital passports for clothing and textiles, which is the EC's first significant regulatory effort to mandate DPP implementation across various products and industries.

Across the pond in the United States, the American Apparel and Footwear Association is advocating for an overhaul of apparel and footwear labelling regulations to incorporate digital labels.

With the goal of approval by 2024, the digital passport has the potential to reduce waste and promote sustainable practices in the fashion and textile industry by emphasising traceability and transparency.

Besides helping the industry understand and track its environmental impact to make more well-informed decisions, the DPP can also support brands in transitioning to adopt more sustainable practices and holding them accountable for measuring the impact of their products.

Although there is no official policy on digital passports for fashion and textile items, the EU is actively investing in research and innovation related to the digitalisation of the fashion and textile industry as part of new legislation.

Enhancing Trust in Products

The DPP revolution is on.

Yes, it can be argued that the technology is still in its early stages, but one cannot deny that the digital passport addresses the industry's issues with self-regulation by enabling brands to showcase their dedication to sustainability and ethical practices.

The solution is enabling the EU's transition to a circular economy known as the CIRPASS - Collaborative Initiative for a Standards-Based Digital Product Passport for Stakeholder-Specific Sharing of Product Data. This initiative aims to establish a standardised digital product passport that facilitates product data sharing among stakeholders in a circular economy. The consortium is uniting a core network of top organisations to develop a unified approach for the Digital Product Passport (DPP) across various value chains in Europe.

Funded by the European Commission through the Digital Europe Programme, CIRPASS aims to lay the groundwork for the gradual piloting and deployment of Digital Privacy-Preserving Technologies (DPPs) starting in 2023. The initial focus is on the electronics, batteries, and textile sectors.

Why now?

Need a reason for "why now"?

According to a study by Garner in 2019, the circular economy is expected to replace wasteful linear economies by 2029. Therefore, DPPs (Digital Product Passports) are crucial in enabling the EU's transition to a circular economy. They establish a foundation based on common rules, principles, taxonomy, and standards.

The fashion industry is currently facing mounting pressure to minimise its environmental impact. So, if one were to zoom in, it would be easier to understand why the development of the DPP (Digital Product Passport) could be an exciting venture for the fashion and textile industry.

The DPP can assist brands in substantiating their environmentally-friendly assertions by simplifying the process of providing a transparent and verifiable account of the production process and materials utilised.

The digital passport can become a valuable tool for improving supply chain management, ensuring products are produced ethically and sustainably. In addition, blockchain technology creates a tamper-proof and permanent record of the product's journey through the supply chain, ensuring transparency and accountability.

Overall, the Digital Passport will enhance and empower the consumer experience by providing access to a wealth of information about the products they purchase. However, DPP has already been trialled by several brands and retailers, such as Chloé, Gabriela Hearst, Pangaia, Mulberry, and Zalando.

Barriers to Adoption

Although DPP (Digital Product Passport) can empower fashion and textile businesses, there are some disadvantages that brands need to be aware of, the most obvious one being cost.

Implementing a digital passport system can be costly, as it necessitates the creation of intricate technology and infrastructure. This cost may be passed on to consumers or businesses, which could create a barrier to adoption.

There are also technical challenges associated with implementing a digital passport system. These include the need for interoperability among different systems and ensuring the security and privacy of personal data.

Lastly, equity issues have also been raised because implementing a Digital Passport system could perpetuate inequalities since not all businesses may have access to the necessary technology.

Next Steps: Preparing for the DPP

On the one hand, there is still uncertainty surrounding the implementation of the DPP, which makes it challenging for companies to anticipate how it will be applied. This uncertainty puts the DPP at risk of impeding early adoption. To avoid this issue, the European Commission needs to provide clear guidance on implementation.

On the other hand, digital product passports are poised to be a significant game-changer for the fashion industry in the upcoming years, particularly for businesses that aim to enhance traceability and explore new revenue streams.

To conclude, DPP will impact all brands selling products in the EU. Therefore, while uncertainties remain, engaging in the EU DPP discussion has reached critical levels that will push through this change whether you are ready for it or not.