Digital Product Passport: A Strategic Tool, Not Just a Sustainability Play

It’s tempting to believe the Ecodesign for Sustainable Products Regulation (ESPR) and the Digital Pr oduct Passport (DPP) will follow the familiar path as CSRD, CSDDD, or the Green Claims Directive — delayed, watered down, or quietly shelved.

That might be a comforting thought on a long winter night when the road forward is beset on all sides with tariffs, cost pressures, and increasing competition from fast fashion — at least ESPR and DPP won’t add insult to injury. But that way of thinking is wishful and dangerously complacent.

Here’s why the DPP is not another “green wish list” that can be sacrificed at the altar of simplification, but a core tool for Europe’s single market, digitalisation, and competitiveness strategy.

1. In Europe’s competitiveness strategy, DPP means cost savings

CSRD, CSDDD, and the Green Claims Directive have been reworked in the Omnibus regulations because of their perceived negative impact on competitiveness. Reports by Enrico Letta (Much more than a market, April 2024) and Mario Draghi (The future of European competitiveness, September 2024) both stress the need to reduce reporting obligations and administrative burdens, especially for SMEs.

But for the Digital Product Passport, their conclusions are different: the DPP is highlighted as a tool to harmonise product rules, scale circular business models, and accelerate digitalisation. Instead of more bureaucracy, it promises cost savings:

One passport, valid across all 27 member states.
No more duplicating conformity certificates and product information in different formats.
Lower administrative costs, especially for SMEs.

2. It’s even part of the dreaded Omnibus package

The Omnibus IV package puts product regulation under the “digital by default” principle. From customs checks to business wallets, product data is moving online.

The Digital Product Passport is not an environmental “add-on” — it’s a cornerstone of the EU’s digital single market infrastructure. It is the EU’s weapon of choice to harmonise and simplify product data rules, reduce administrative burdens, and finally move away from paper-based compliance.

The same approach is highlighted also in the Single Market Strategy, where the DPP is identified as the main tool for disclosing and sharing product information across all new and revised product legislation due to its cost benefits.

3. It’s key to harmonise, simplify, and digitalise EU product legislation

The ongoing revision of the New Legislative Framework (NLF) — the backbone of EU product law — identifies the Digital Product Passport as a tool to simplify product rules and related compliance, especially for SMEs.

The rationale is clear: once the DPP is in place, SMEs will face fewer fragmented obligations, lower compliance expenses, and less red tape.

In short:

Without the DPP → 27 national systems.
With the DPP → one harmonised passport, lower costs, and easier access to new markets.

4. It’s a tool to ensure safe and sustainable e-commerce

The Commission’s 2025 Communication on sustainable e-commerce makes it clear: millions of low-value imports bypass EU rules. The Digital Product Passport will be the enforcement tool for customs authorities to ensure every product sold online, whether from Milan or Shenzhen, meets EU standards.

This matters for SMEs: it levels the playing field. You will no longer be undercut by imports that skip compliance costs. At the same time, the Commission has announced it will reuse the DPP system in other policy areas, making it a multi-purpose tool for the EU.

5. The roadmap is already live

July 2024: ESPR entered into force (Regulation (EU) 2024/1781).
April 2025: Commission published the ESPR Working Plan 2025–2030 (COM/2025/187 final), prioritising textiles, batteries, electronics, and steel.
2025: Delegated acts are now being drafted; working groups are active.
2030: Broader coverage across product sectors.

This is not a theory. It’s happening now.

What this means for SMEs

The Digital Product Passport is not another compliance burden that may fade away. It is becoming the default way of doing business in Europe.

Cost savings: One passport instead of 27 national regimes. Less admin, fewer duplicate certificates, lower compliance costs.
Revenue opportunities: Brands, retailers, recyclers, and resellers will increasingly demand DPP data. Being ready opens resale, repair, preferred supplier status, and access to circular business models.
Competitive edge: Larger players are already piloting DPP systems. SMEs that wait risk being locked out of supply chains as procurement shifts to DPP-ready partners.
Efficiency gains: Automate product data flows. Free sales and compliance teams to focus on customers and growth, not spreadsheets.

Conclusion: Compliance that pays off

The Digital Product Passport system is not going away. It is Europe’s bet on a harmonised single market, a competitive data economy, and new digital business models.

For SMEs, the choice is clear: