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With the Ecodesign for Sustainable Products Regulation (ESPR), the Digital Product Passport (DPP) becomes a key driver of Europe’s sustainability policy. It is designed to create transparency about materials, origin, and environmental impact, helping to accelerate the transition toward a circular economy across the EU.

For manufacturers, implementing the DPP is far more than a compliance task. It represents a fundamental transformation of data architecture, supply chain governance, and IT systems. The following five challenges are the most significant for companies preparing for DPP readiness.

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1. Lack of Data Availability and Quality Across Complex Supply Chains

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The greatest challenge lies in accessing reliable, product-specific data, especially across multi-tier supply chains. Many Tier-2 and Tier-3 suppliers, particularly SMEs, lack digital interfaces or standardized processes for collecting and sharing product data.

Manufacturers therefore need to actively enhance their suppliers’ data maturity by introducing contractual requirements, audits, and digital tools for data capture and validation.

If these mechanisms are missing, the risk of greenwashing accusations rises significantly. Incomplete or inaccurate information can also increase regulatory liability, since the manufacturer or importer is ultimately held responsible for product data.

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2. Interoperability and Standards

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Another key issue is technological fragmentation. Binding EU-wide standards for data models, APIs, and communication protocols are still under development.

This leads to investments in proprietary single-purpose systems that may later prove incompatible with EU platforms or registers. Companies should therefore invest early in open architectures and Data Space connectors, such as those promoted by initiatives like Catena-X or Manufacturing-X. These architectures enable long-term adaptability to evolving regulatory requirements.

Interoperability is not a technical detail — it is a strategic safeguard for future readiness.

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3. Regulatory Uncertainty and Evolving Requirements

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The EU is defining DPP requirements gradually through Delegated Acts. For many product categories — from textiles to electronics — the detailed rules are still pending.

This creates a dilemma. Companies that invest early risk misalignment with future regulations. Those who wait risk missing critical deadlines.

The solution lies in modular IT architectures that can quickly adapt to new data points, such as additional CO₂ metrics or modified repair reporting protocols. Continuous regulatory monitoring will become an ongoing necessity for all affected organizations.

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4. Protection of Intellectual Property and Sensitive Data

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The DPP requires extensive transparency, including details on material compositions and production processes. For many manufacturers, this is a delicate balance between openness and the protection of trade secrets.

The key lies in technically supported access control concepts. Only authorized actors — such as recyclers or market surveillance authorities — should have access to the specific data they need. Well-implemented data access rights within a governance framework can mitigate IP risks while ensuring compliance with transparency requirements.

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5. Organizational and Cultural Transformation

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Implementing the DPP is not purely an IT project. It is a company-wide change management challenge that affects legal, procurement, production, sustainability, IT, and service functions alike.

Without centralized governance, costly parallel structures emerge. Establishing cross-functional DPP taskforces with clear responsibilities — including Data Stewards, Legal, Procurement, and IT — has proven to be an effective model.

Only when data governance, system architecture, and compliance are aligned can organizations meet regulatory requirements efficiently while unlocking new business opportunities.

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Sector-Specific Differences

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The level of complexity and strategic focus differs widely by industry.

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Sector	Main Focus	Key Challenge
Batteries	CO₂ footprint, material origin, recyclability	More than 90 data points, high regulatory density, mandatory from February 2027
Textiles	Material composition, supply chain transparency	Extremely high volumes, globally fragmented supply chains
Electronics & Mechanical Engineering	Repairability, durability, spare parts	Long-term data maintenance and protection of sensitive IP information

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Strategic Guidelines for Manufacturers

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The DPP should be seen not only as a regulatory obligation, but also as a strategic opportunity. Three guiding principles can help manufacturers prepare effectively.

Gradual rollout with pilot products
Start with small, representative pilot projects to identify data gaps and process challenges early. sqanit also offers Free Trials and Starter Packages for limited product batches.
Active participation in standardization and Data Spaces
Engaging in initiatives like Catena-X, CIRPASS, and similar projects allows companies to help shape the standards that will define the future DPP landscape.
Compliance with added business value
Use DPP data to improve operations, optimize material use, and strengthen brand communication rather than viewing it solely as a reporting tool. With sqanit, you can extend your DPP with features such as an AI Assistant, integrated webshop links, and much more.

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Conclusion

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Implementing the Digital Product Passport is challenging but unavoidable. Companies that act now can turn mandatory efforts into competitive advantages. Success depends on stronger supply chains, better data quality, improved resilience, and greater trust among customers and partners.

In the coming years, the DPP will evolve into both a prerequisite for market access in Europe and a decisive factor for differentiation in an increasingly transparent and circular economy.

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The Biggest Challenges in Implementing the Digital Product Passport (DPP)

1. Lack of Data Availability and Quality Across Complex Supply Chains

2. Interoperability and Standards

3. Regulatory Uncertainty and Evolving Requirements

4. Protection of Intellectual Property and Sensitive Data

5. Organizational and Cultural Transformation

Sector-Specific Differences

Strategic Guidelines for Manufacturers

Conclusion

Further Reading

Official EU Documents and Institutions

Reports and Studies by Leading Consultancies

Research and Institutional Reports

Additional Resources

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