Digital Product Passport: Finding the Right Balance Between Transparency for Circularity and Added Red Tape

The aim of this digital tool is to provide product-relevant data transparently to all stakeholders involved. The DPP offers many chances, but also challenges and implementation barriers. This paper contributes to the debate on DPPs by presenting results of a recent company survey in Germany conducted by the German Economic Institute (IW). Since many German firms are not yet familiar with or ready for the DPP, a practicable cross-sectoral implementation solution is needed.

Necessity of Digital Product Passports

The transition to a circular economy is a key pillar of the European Green Deal, the European strategy for climate-friendly growth. The aim of a circular economy is to consume fewer resources, use them several times or replace them entirely with more climate-friendly alternatives. The necessary view on the entire product life cycle requires knowledge of both the upstream stages and the effects of one’s own actions on downstream stages of the value chain (Neligan et al., 2023). Hence, the various players along the value chain are required to communicate efficiently – and therefore automatically – via interfaces. Digital data is needed to measure and evaluate the success of circular material flows and business models. One solution is the planned DPP to make product data on materials, properties, repair and disposal options available transparently and efficiently to all stakeholders in the product life cycle (Neligan, 2025).