Case study: Digital product passports & traceability — a startup-to-enterprise scale story

The European Union's Ecodesign for Sustainable Products Regulation (ESPR), which entered into force on July 18, 2024, represents the world's first legally binding product transparency framework. By 2030, approximately 30 product categories sold within the EU will require Digital Product Passports (DPPs)—digital records containing comprehensive data about a product's origin, materials, environmental impact, and end-of-life handling. The DPP market has grown from $186 million in 2024 to a projected $1.78 billion by 2030, reflecting a 45.7% compound annual growth rate. This explosive trajectory creates both urgent compliance pressure and significant commercial opportunity for organizations navigating the transition from pilot implementations to enterprise-scale deployments.

Battery passports become mandatory on February 18, 2027, for industrial and EV batteries—affecting over 800 million battery units annually. Textiles, electronics, and construction materials follow between 2027 and 2029. For companies operating in these sectors, the question is no longer whether to implement DPPs, but how to scale implementations that began as startup experiments into robust enterprise systems without sacrificing data quality or drowning in interoperability challenges.

Why It Matters

Digital Product Passports matter because they transform abstract circular economy ambitions into measurable, verifiable actions. The EU estimates that only 20% of electronic waste is currently recycled, while textile waste is projected to reach 134 million tons annually by 2030. These numbers reflect a systemic failure: manufacturers, recyclers, and consumers lack the information needed to close material loops. A smartphone entering the waste stream today carries no accessible record of its cobalt sources, battery chemistry, or disassembly instructions. A polyester garment reveals nothing about its recycled content, dye composition, or take-back options.

DPPs address this information asymmetry by creating machine-readable, standardized product records accessible via QR codes, NFC chips, or RFID tags. The business case extends beyond compliance. BASF's pilot program with Circularise and Porsche demonstrated a 22% improvement in supply chain traceability—translating directly into reduced audit burden, faster supplier qualification, and enhanced ability to substantiate sustainability claims. SAP's Green Token platform has reduced audit preparation time by 30% for participating companies by enabling real-time ESG data sharing across supply chains.

For circular economy practitioners, DPPs represent infrastructure rather than overhead. They enable repair networks to access maintenance histories, recyclers to identify material compositions without destructive testing, and manufacturers to reclaim high-value components at end of life. The EU's CIRPASS consortium, which concluded its first phase in March 2024, documented that effective DPP systems can reduce administrative effort by up to 80% for ESPR compliance while simultaneously enabling new circular business models.

Key Concepts

DPP Standards and Data Schemas

The EU's approach to DPP standardization rests on several technical pillars. Each product requires a unique identifier compliant with ISO/IEC 15459, typically a GTIN (Global Trade Item Number) or serialized equivalent. The data schema mandates manufacturer details, material composition, carbon footprint metrics, substances of concern, durability and reparability information, and end-of-life guidance. Data must be retained for the product's lifetime plus a minimum of ten years and stored with a certified DPP Service Provider for backup.

The Battery Pass Consortium, which includes Siemens, Circulor, and other industry participants, published technical guidance in April 2024 specifying over 100 data attributes for battery passports. These range from static information (manufacturer, capacity, chemistry) to dynamic data (state of health, calibration records, ownership changes). The granularity reflects regulatory intent: DPPs must support not just point-of-sale transparency but entire lifecycle traceability.

Blockchain vs. Centralized Approaches

The technology architecture debate centers on blockchain-based versus centralized database approaches. Blockchain currently commands approximately 45% of the DPP software market, valued for its immutability and distributed verification. Circulor's platform uses blockchain to trace cobalt, lithium, and nickel through battery supply chains, providing cryptographic proof that materials originate from certified sources. The tradeoff involves transaction costs, energy consumption, and integration complexity.

Centralized approaches, exemplified by traditional Product Information Management (PIM) and Enterprise Resource Planning (ERP) integrations, offer lower implementation barriers and familiar operational models. SAP's cloud-based DPP service, launched in Q3 2024, integrates directly with existing ERP systems, reducing the change management burden for enterprises already invested in SAP infrastructure. However, centralized systems depend on trust in the platform operator—a single point of failure that blockchain advocates argue undermines the transparency DPPs are meant to provide.

Hybrid models are emerging. Circularise combines blockchain foundations with zero-knowledge proofs—cryptographic techniques that allow verification of claims without revealing underlying proprietary data. This "Smart Questioning" approach enables a buyer to confirm that a material meets sustainability criteria without accessing the supplier's complete production records, addressing confidentiality concerns that have slowed adoption in competitive supply chains.

Dynamic vs. Static Data Collection

Effective DPPs require both static product specifications and dynamic lifecycle data. Static data—manufacturer identity, material composition, compliance certifications—can be populated at production and rarely changes. Dynamic data—maintenance logs, ownership transfers, state-of-health readings—must update throughout the product's life. The ESPR mandates continuous logging for applicable products, creating ongoing data collection requirements that extend far beyond initial product registration.

This distinction has profound implications for implementation architecture. Static data collection can be achieved through batch processes integrated with manufacturing execution systems. Dynamic data collection requires persistent connectivity, IoT integration, and distributed update mechanisms. Organizations that treat DPP implementation as a one-time product launch exercise discover too late that the operational infrastructure for lifecycle data management represents the greater technical challenge.

What's Working and What Isn't

What's Working

Phased Rollouts with Single-Product Pilots

Organizations achieving enterprise scale without catastrophic failures share a common pattern: they start small and prove the model before expanding. Polestar's partnership with Circulor began in 2021 with blockchain-traced cobalt and mica for the Polestar 2. Only after validating data quality and supplier cooperation did they expand to lithium and nickel tracking for the Polestar 3. This phased approach allowed iterative refinement of data collection processes, supplier training, and system integration—resulting in a reported 9% reduction in GHG emissions per vehicle sold by 2023.

The CIRPASS-2 project, launched in May 2024 with 49 consortium partners, explicitly structures its work around sector-specific pilots before cross-sector harmonization. The first phase focused on batteries, electronics, and textiles independently before attempting unified frameworks. This sequencing reflects hard-won experience: premature standardization across dissimilar product categories produces schemas too generic for meaningful use.

Supplier Collaboration as Core Competency

DPP data quality depends entirely on supplier cooperation. Manufacturers cannot populate material composition fields without upstream disclosure; carbon footprint calculations require Scope 3 emissions data that spans multiple supply chain tiers. Organizations treating supplier engagement as a compliance checkbox rather than a strategic capability find their DPPs populated with placeholders and estimates.

Siemens' SiGREEN platform addresses this by creating shared incentives. The battery passport system, part of the Siemens Xcelerator portfolio launched in 2024, provides participating suppliers with access to aggregated benchmarking data and compliance documentation they can reuse across customer relationships. This "give to get" model transforms supplier data requests from burden to benefit. Early results indicate that SiGREEN provides up to 80% of the data required for EU DPP compliance, with participating companies reporting reduced time spent responding to customer sustainability questionnaires.

Integration with Existing Systems

Successful implementations treat DPP infrastructure as an extension of existing IT systems rather than a parallel universe. SAP's June 2024 partnership with IBM combines blockchain traceability with ERP integration, allowing DPP data to flow from the same systems that manage inventory, procurement, and quality control. This architectural choice reduces data entry duplication, improves data consistency, and leverages existing access controls and audit mechanisms.

Circularise's API-first approach enables similar integration flexibility, connecting DPP platforms with customer-facing interfaces, PIM systems, and third-party sustainability rating services. The technical architecture matters less than the integration philosophy: DPPs that exist as isolated databases, disconnected from operational systems, suffer from data staleness and manual reconciliation overhead that undermines their value.

What Isn't Working

Data Quality Theater

The most insidious failure mode involves DPP implementations that meet formal requirements while providing minimal actual transparency. Populating carbon footprint fields with industry-average estimates, listing material compositions at category level rather than specific compounds, and omitting substances of concern through narrow scope definitions all produce compliant passports with limited utility. This "measurement theater" satisfies auditors while failing to enable circular economy outcomes.

The problem compounds at scale. Early-stage pilots with direct manufacturer oversight can enforce rigorous data standards. Enterprise rollouts spanning thousands of SKUs and hundreds of suppliers inevitably face pressure to accept lower-quality inputs to meet coverage targets. Organizations that lack automated data validation—checking carbon footprint figures against production volumes, flagging statistically improbable material compositions, requiring source documentation for environmental claims—discover data quality issues only when regulators or customers raise questions.

Interoperability Fragmentation

The DPP technology landscape includes dozens of competing platforms with limited interoperability. A battery manufacturer using Circulor's blockchain system cannot seamlessly share data with a vehicle OEM using SAP's ERP-integrated approach. The EU's planned DPP Registry, scheduled to launch in July 2026, will provide centralized access to passport data—but the underlying systems remain fragmented.

This fragmentation creates practical problems. Supply chain partners using different platforms must either maintain multiple integrations, accept lowest-common-denominator data exchange, or force standardization on a single platform—often alienating suppliers with existing infrastructure investments. The CIRPASS consortium has developed interoperability recommendations, but voluntary adoption proceeds slowly when competing vendors have commercial incentives to lock in customers.

Underestimating Lifecycle Data Complexity

Organizations often budget for initial DPP population while ignoring ongoing lifecycle data requirements. Battery state-of-health monitoring requires persistent connectivity and calibrated sensors; maintenance record updates depend on service partner participation; ownership transfers need integration with registration and resale systems. These dynamic data flows represent the majority of long-term DPP operational costs.

Companies that pilot DPPs with static data only discover the gap when regulators begin enforcing lifecycle requirements. Retrofitting connectivity to installed products proves expensive or impossible; establishing data sharing agreements with independent service providers requires negotiation cycles that extend beyond compliance deadlines. The lesson is clear: lifecycle data infrastructure must be designed into products and supply chain relationships from the outset.

Key Players

Established Leaders

SAP launched its cloud-based DPP service in Q3 2024, positioning it as an extension of existing ERP and product lifecycle management systems. The Green Token platform enables supply chain ESG data sharing with demonstrated audit preparation time reductions of 30%. Strategic partnerships with IBM and logistics providers extend platform capabilities into blockchain integration and physical product tracking.

Siemens operates SiGREEN as part of its Xcelerator portfolio, with particular strength in battery passports and industrial manufacturing applications. The platform tracks over 100 data attributes and integrates IT and OT (operational technology) systems for real-time lifecycle monitoring. Siemens participates actively in Germany's national DPP framework development and the EU CIRPASS consortium.

BASF approaches DPP implementation from the chemical industry perspective, focusing on material provenance, carbon emissions, and recyclability tracking for chemical products and their downstream applications. The partnership with Circularise and Porsche demonstrated practical traceability improvements in automotive supply chains.

IBM contributes blockchain and enterprise integration expertise through partnerships with SAP and independent DPP initiatives. The company's supply chain transparency solutions, developed for food traceability applications, provide foundational technology adapted for sustainability compliance use cases.

Emerging Startups

Circulor (UK) specializes in blockchain-based traceability for batteries, automotive, and raw materials. The company is an active member of the Battery Pass Consortium and maintains long-term partnerships with automotive OEMs including Polestar and Volvo. Core capabilities include real-time carbon tracking and material provenance verification.

Circularise (Netherlands) offers an end-to-end supply chain traceability platform distinguished by zero-knowledge proof technology for privacy-preserving data sharing. The company participates in the CIRPASS-2 expert group shaping future DPP legislation and has deployed implementations across chemicals, plastics, batteries, textiles, and construction materials.

Kezzler provides serialization and traceability solutions adaptable to DPP requirements, with particular strength in consumer goods and pharmaceutical supply chains. The platform enables item-level tracking across global supply chains using cloud-based architecture.

Spherity focuses on decentralized identity and credentialing systems applicable to DPP verification, enabling trustworthy data exchange without centralized platform dependencies.

Renoon targets fashion and textile DPP requirements, addressing sector-specific challenges including complex multi-tier supply chains and high SKU counts.

Key Investors and Funders

The EU Horizon Europe program and Digital Europe Programme provide substantial public funding for DPP development. CIRPASS-2, running from May 2024 through April 2027, represents coordinated EU investment in cross-sector DPP infrastructure and standards.

Climate-focused venture capital firms including Lowercarbon Capital, Breakthrough Energy Ventures, and Congruent Ventures have invested in sustainability software platforms with DPP-adjacent capabilities. Corporate venture arms from automotive and chemical sectors participate in strategic funding rounds for traceability startups addressing their supply chain visibility needs.

Examples

Polestar and Circulor: Automotive Battery Traceability at Scale

Polestar's partnership with Circulor, initiated in 2021, demonstrates successful scaling from single-material pilot to comprehensive battery traceability. The initial phase tracked cobalt and mica—materials associated with ethical sourcing concerns—through the Polestar 2 supply chain. After validating blockchain-based tracking mechanisms and establishing supplier data collection processes, the program expanded to lithium and nickel for the Polestar 3.

Quantified outcomes include blockchain-verified provenance for 100% of targeted risk minerals and a 9% reduction in GHG emissions per vehicle sold by 2023. The implementation required extensive supplier training, integration with existing quality management systems, and development of standardized data formats compatible with multiple upstream sources. Key success factors included executive sponsorship treating traceability as a brand differentiator rather than a compliance burden, and willingness to invest in supplier capability building rather than simply mandating data submission.

ScaleAQ and Circularise: Circular Plastics in Aquaculture

ScaleAQ's collaboration with Circularise produced the first Digital Product Passport for circular plastics in aquaculture—tracking approximately 20 components in the Vortex fish farming pen system. The implementation addressed a sector with complex material flows, extended product lifecycles, and fragmented end-of-life handling.

The pilot demonstrated that DPP principles developed for consumer products can adapt to industrial contexts with appropriate customization. Material composition tracking enables targeted recycling at end of life; component identification supports maintenance and part replacement throughout the pen's operational period. The implementation leveraged Circularise's privacy-preserving technology to share necessary data with recycling partners without exposing proprietary design information.

Battery Pass Consortium: Cross-Industry Standardization

The Battery Pass Consortium, which published technical guidance and a software demonstrator in April 2024, represents successful coordination among competing enterprises to establish shared infrastructure. Participants include Siemens, Circulor, BMW, Umicore, and Audi—companies with distinct commercial interests that nonetheless recognized collective benefit in common standards.

The consortium's output includes detailed data attribute specifications, technical architecture recommendations, and working software demonstrating passport creation, update, and retrieval. This collaborative approach accelerated individual company implementations by providing validated reference architectures and reducing duplicative standards development. The demonstrator was presented at Hannover Messe 2024, generating industry-wide visibility and adoption momentum.

Action Checklist

• Conduct a data audit to identify gaps in sourcing information, sustainability metrics, and end-of-life data across your product portfolio—prioritizing categories facing earliest regulatory deadlines
• Select a pilot product category with manageable supply chain complexity and supportive supplier relationships to validate DPP processes before broader rollout
• Establish data quality standards and automated validation checks before accepting supplier inputs—define acceptable sources, required precision levels, and verification procedures
• Build lifecycle data infrastructure concurrently with static product registration—design connectivity, sensor integration, and partner data sharing agreements for dynamic updates
• Evaluate technology platforms based on integration capability with existing systems rather than feature lists—prioritize API availability, ERP compatibility, and demonstrated interoperability
• Develop supplier engagement programs that create reciprocal value—offer compliance documentation, benchmarking data, or simplified customer questionnaire processes in exchange for DPP data contribution
• Monitor CIRPASS-2 outputs and sector-specific delegated acts from the European Commission to anticipate requirement changes before final deadlines
• Establish cross-functional governance including sustainability, IT, procurement, and legal stakeholders—DPP implementation spans organizational boundaries and requires coordinated decision-making

FAQ

Q: What is the realistic cost of implementing DPP systems for a mid-sized manufacturer? A: Implementation costs vary significantly based on product complexity, supply chain depth, and existing digital infrastructure. Companies with mature ERP and PLM systems report integration-focused implementations in the range of €200,000 to €500,000 for initial deployment across a limited product category. Organizations requiring substantial supplier onboarding, new data collection infrastructure, or custom development face costs of €1 million or more. Ongoing operational costs—data validation, system maintenance, lifecycle updates—typically run 15-25% of initial implementation costs annually. The critical variable is data quality: implementations that accept low-quality supplier data reduce upfront costs but face expensive remediation when regulators or customers demand verification.

Q: How do blockchain-based DPP systems handle confidential supplier information? A: Privacy-preserving approaches have evolved substantially. Zero-knowledge proofs, as implemented by Circularise, allow verification of claims without revealing underlying data—a buyer can confirm that cobalt originates from a certified mine without accessing the complete supplier audit. Permissioned blockchain architectures restrict data visibility to authorized participants, with cryptographic controls governing access levels. Hybrid models store sensitive details in off-chain databases with only hashes and verification commitments on the public ledger. The appropriate approach depends on specific confidentiality requirements: highly competitive supply relationships may require zero-knowledge techniques, while vertically integrated supply chains can often use simpler permissioned access models.

Q: What happens to companies that miss DPP compliance deadlines? A: The ESPR establishes market access requirements—products without compliant DPPs cannot be legally sold in the EU after applicable deadlines. Enforcement mechanisms include market surveillance, customs controls, and penalties determined by member state legislation. More immediately, major enterprise buyers are incorporating DPP requirements into procurement specifications ahead of regulatory deadlines, creating commercial consequences for non-compliance independent of regulatory enforcement. Companies that delay implementation risk both market access restrictions and competitive disadvantage as customers shift to suppliers with demonstrated traceability capabilities.

Q: How should organizations handle DPP requirements for products already in the market? A: The ESPR applies to products placed on the market after regulatory deadlines take effect—existing installed products are not retroactively subject to DPP requirements. However, lifecycle data obligations for new products create incentives to establish data collection infrastructure capable of capturing information from products already in service. Battery state-of-health monitoring, for example, benefits from historical data even for batteries manufactured before passport requirements. Organizations should evaluate whether retrofitting data collection capability to existing products supports circular economy objectives beyond strict compliance, recognizing that such investments may enable maintenance contracts, certified refurbishment programs, or material recovery operations with commercial value.

Q: Which product categories should companies prioritize for DPP implementation? A: Regulatory sequencing provides the primary prioritization framework: batteries (February 2027), followed by textiles and electronics (2027-2028), then construction materials, toys, and vehicles (2028-2030). Within this sequence, companies should prioritize products with complex supply chains where traceability provides competitive differentiation; high-value products where lifecycle data enables new service offerings; and products facing customer pressure for sustainability documentation independent of regulatory timelines. Starting with products that have cooperative supplier relationships and manageable data complexity allows organizational learning before tackling more challenging categories.

Sources

• European Commission, "Ecodesign for Sustainable Products Regulation (ESPR) - Regulation (EU) 2024/1781," Official Journal of the European Union, July 2024
• Battery Pass Consortium, "Technical Guidance for EU Battery Passport Implementation," Published April 2024, presented at Hannover Messe 2024
• CIRPASS Project, "The Digital Product Passport for the Circular Economy: Recommendations for Policy, Business, and IT," Final Report, March 2024
• Markets and Markets, "Digital Product Passport Market Analysis: 2024-2030," Market Research Report, 2024
• Circulor Newsletter, "Beyond Compliance: The Strategic Value of Digital Product Passports," April 2024
• Circularise, "Digital Product Passports for ESPR Compliance: Ultimate Guide," Published 2024
• data.europa.eu, "EU's Digital Product Passport: Advancing Transparency and Sustainability," European Commission Publication, 2024
• Siemens AG, "SiGREEN Battery Passport: Technical Specifications and Integration Guide," Siemens Xcelerator Documentation, 2024