Trend watch: Supply chain traceability & product data in 2026 — signals, winners, and red flags

The digital product passport (DPP) market reached $310 million in 2024 and is projected to surge to $1.78 billion by 2030—a compound annual growth rate of 45.7%. This extraordinary growth reflects a fundamental shift in how products are tracked, verified, and reported throughout their lifecycles. For product and design teams, particularly those operating in or selling to emerging markets, mastering supply chain traceability has become the defining capability challenge of 2026.

Why It Matters

The EU's Ecodesign for Sustainable Products Regulation (ESPR), adopted in Q2 2024, mandates digital product passports across multiple product categories including batteries, textiles, electronics, and automotive components. The EU Battery Regulation, already in force, requires lifecycle tracking and material sourcing transparency. These regulations don't merely affect EU-based operations—they create compliance requirements for any product sold into the €16 trillion EU market.

For emerging market manufacturers, the implications are profound. A Bangladeshi textile factory, a Vietnamese electronics assembler, or a Brazilian agricultural producer must now provide supply chain data that meets European verification standards. The alternative—exclusion from the world's most lucrative consumer market—is not viable for most businesses.

The Scope 3 imperative compounds these pressures. Under CSRD requirements, EU companies must report emissions across their entire value chain, creating cascading data demands throughout global supply networks. Only 23% of companies currently report Scope 3 emissions with "high confidence" (CDP, 2024), indicating the massive capability gap that must be closed.

Metric	2024 Baseline	2026 Target	Best-in-Class
Supplier visibility (Tier 1)	85%	95%	99%+
Supplier visibility (Tier 2+)	35%	60%	80%+
Scope 3 data confidence	23% high	50% high	75%+ high
DPP readiness (batteries)	15%	80%	95%
Supply chain mapping depth	2.1 tiers	4+ tiers	Full chain

Key Concepts

Digital Product Passports (DPPs) represent standardized digital records containing product composition, origin, environmental impact, and compliance data. The EU framework specifies data architecture requirements, unique identifiers (typically QR codes), and access protocols. DPPs must be interoperable across platforms and accessible to consumers, regulators, and value chain partners with appropriate permission levels.

Multi-Tier Visibility refers to supply chain transparency beyond immediate (Tier 1) suppliers. Most sustainability impacts—and risks—reside in Tier 2 and beyond. Modern traceability requires mapping and monitoring suppliers multiple tiers deep, often to raw material extraction. Technologies enabling this depth include blockchain (for immutable audit trails), IoT sensors (for real-time condition monitoring), and AI (for pattern detection and anomaly identification).

Climate APIs are standardized interfaces enabling automated sustainability data exchange between systems. Organizations like PACT (Partnership for Carbon Transparency) and WBCSD are developing API standards that enable real-time emissions data sharing across supply chains without manual data collection and transformation.

Traceability-as-a-Service business models have emerged as adoption accelerators, particularly for emerging market suppliers lacking technical resources. Platforms like Circularise, TrusTrace, and Sourcemap offer subscription-based traceability infrastructure, reducing implementation barriers while ensuring data interoperability.

What's Working and What Isn't

What's Working

Blockchain-Enabled Verification: Blockchain traceability solutions have reached commercial maturity, with the market growing from $2.89 billion in 2024 to a projected $44.3 billion by 2034 (31.4% CAGR). Successful implementations focus on high-value applications: conflict minerals tracking, pharmaceutical serialization, and luxury goods authentication. Circularise's April 2025 partnership with Samsonite demonstrates enterprise-scale deployment, providing material passport tracking across the luggage manufacturer's global supply chain.

IoT Integration for Real-Time Monitoring: Sensor networks now enable continuous condition tracking throughout supply chains. Applications span cold chain integrity for pharmaceuticals and food, environmental condition monitoring for sensitive components, and location tracking for high-value goods. Microsoft's supply chain platform monitors 1.1 million supplier nodes with real-time data feeds, demonstrating achievable scale.

Collaborative Data Standards: Industry initiatives are accelerating standardization. The Catena-X automotive data ecosystem, backed by BMW, Mercedes-Benz, and Volkswagen, enables standardized data exchange across automotive supply chains. Similar initiatives in textiles (Fashion Positive) and electronics (Responsible Minerals Initiative) are creating sector-specific interoperability.

What Isn't Working

Legacy System Integration: 27% of traceability projects face significant integration challenges with existing ERP and supply chain management systems (Straits Research, 2024). Many emerging market suppliers operate on decades-old systems—or paper-based processes—incompatible with digital passport requirements. Integration costs often exceed initial platform investments.

Data Quality at Source: Traceability infrastructure is only as reliable as input data. Emerging market suppliers frequently lack the measurement capabilities, process controls, and documentation practices required for high-confidence data. Scope 3 emissions data, in particular, often relies on industry averages rather than actual measurements—undermining the precision traceability promises.

Cost Distribution Inequity: While regulatory requirements originate from EU frameworks, implementation costs fall disproportionately on emerging market suppliers. A 2024 survey found that average traceability implementation costs for SME suppliers in Southeast Asia exceeded $75,000—prohibitive for many small-scale producers. Without buyer financing or subsidized solutions, supply chain digitization risks excluding smaller suppliers.

Verification Gaps: Despite sophisticated tracking infrastructure, verifying physical-digital correspondence remains challenging. Products can be substituted, data can be falsified at entry points, and blockchain immutability does not prevent garbage-in/garbage-out scenarios. Physical verification mechanisms—chemical fingerprinting, isotope analysis, satellite monitoring—add cost and complexity.

Key Players

Established Leaders

SAP has integrated sustainability data management into its core ERP platform, enabling automated traceability and reporting aligned with CSRD and DPP requirements. SAP's Green Token solution specifically addresses digital product passport generation.

IBM provides blockchain-based traceability through IBM Food Trust and similar platforms, with particular strength in pharmaceutical serialization and food safety applications. Their June 2024 partnership with SAP enhanced ERP-blockchain integration.

Siemens launched the Battery Passport Platform in November 2024, specifically addressing EU Battery Regulation requirements. The platform integrates with Siemens' broader industrial software ecosystem and demonstrates manufacturing-focused traceability capabilities.

Emerging Startups

Circularise (Netherlands) offers blockchain-based digital product passport infrastructure with particular strength in automotive and electronics supply chains. Their end-to-end encryption approach enables data sharing while protecting competitive information.

TrusTrace (Sweden) provides fashion and textile traceability, enabling brand-to-raw material visibility. Their platform is specifically designed for the fragmented, complex supply chains characteristic of apparel manufacturing.

Minespider (Germany) focuses on mineral and raw material traceability, critical for conflict minerals compliance and battery material verification.

Key Investors & Funders

UNECE and ISO jointly launched a DPP standardization initiative in April 2025, providing governance for emerging data standards and North American alignment with EU frameworks.

The European Investment Bank (EIB) provides financing for supply chain digitization projects, with particular focus on enabling SME supplier participation in digital passport ecosystems.

Maersk Growth (the venture arm of shipping giant Maersk) invests in supply chain visibility technologies, recognizing that traceability requirements create commercial opportunities for logistics providers.

Examples

Toyota's EV Battery Traceability System: Toyota implemented full lifecycle tracking for electric vehicle batteries, spanning mineral extraction (cobalt, lithium, nickel), cell manufacturing, vehicle assembly, in-use monitoring, and end-of-life processing. The system combines blockchain-based chain of custody with IoT sensor data for battery health monitoring. By 2025, Toyota achieved 92% material traceability to mine-of-origin—compared to an industry average of 45%—positioning the company for EU Battery Regulation compliance while generating insights that improve battery design and recycling processes (Toyota Environmental Report, 2025).
H&M's Supplier Digitization Program: Facing traceability requirements for EU textile markets, H&M invested €50 million in supplier digitization across Bangladesh, Vietnam, and Cambodia. The program provides subsidized traceability infrastructure, training, and technical support to over 800 Tier 1-3 suppliers. By 2025, 78% of H&M's cotton could be traced to farm level—compared to 23% in 2022. The program demonstrates how buyer investment can overcome emerging market capability gaps while creating competitive advantage through verified sustainability claims (H&M Sustainability Report, 2025).
Nestlé's Blockchain Coffee Traceability: Nestlé deployed blockchain traceability across its coffee supply chain, enabling consumers to scan QR codes and view the journey from farm to shelf. The system covers 120,000 farmers across 13 countries, with particular depth in emerging markets including Ethiopia, Colombia, and Vietnam. Beyond consumer transparency, the platform provides supply chain managers with real-time visibility into quality, pricing, and sustainability metrics across previously opaque networks. Farmer-level data has enabled targeted interventions—agronomic advice, financing, certification support—that improve both sustainability outcomes and coffee quality (Nestlé Creating Shared Value Report, 2025).

Action Checklist

Conduct supply chain mapping to Tier 3+ depth, identifying critical nodes, data gaps, and capability constraints in supplier networks
Assess current systems against DPP requirements, identifying integration requirements and data architecture changes needed
Develop Scope 3 data improvement roadmap, prioritizing high-impact categories and implementing primary data collection where feasible
Evaluate traceability-as-a-service platforms for emerging market suppliers lacking technical resources
Establish supplier support programs including financing, training, and technical assistance for traceability implementation
Implement pilot DPP programs in priority product categories, testing data collection, verification, and access protocols before full rollout

FAQ

Q: How should emerging market suppliers prepare for DPP requirements? A: Start with data fundamentals: implement or improve measurement systems for key sustainability metrics (energy, water, emissions, waste). Evaluate cloud-based traceability platforms that minimize upfront infrastructure requirements. Engage with major customers about their compliance timelines and support programs. Consider industry associations that provide collective solutions for smaller suppliers.

Q: What does "good" Scope 3 data quality look like? A: Best-in-class organizations achieve 75%+ of Scope 3 emissions calculated from primary supplier data rather than industry averages. This requires active supplier engagement, standardized data collection templates, and verification mechanisms. Interim benchmarks: 50% primary data within 2 years, with clear improvement trajectories documented.

Q: How do digital product passports affect product design decisions? A: DPP requirements must inform design from concept stage. Material choices affect traceability complexity—novel materials may lack established tracking infrastructure. Product architecture affects disassembly and recycling data requirements. Design teams should include traceability requirements in design reviews and prototype validation.

Q: What are the integration requirements between traceability platforms and existing systems? A: Successful integration typically requires: ERP connectivity (SAP, Oracle, Microsoft Dynamics); PLM integration for design data; supply chain management system integration; quality management system connectivity; and IoT/sensor platform integration. API-first traceability platforms minimize custom development, but expect 3-6 months integration timelines for enterprise deployments.

Q: How can organizations verify physical-digital correspondence in supply chains? A: Multi-layer verification combines: digital tracking (blockchain, IoT); document verification (AI-powered document analysis); physical verification (chemical fingerprinting, isotope analysis, DNA markers); and satellite/aerial monitoring for agricultural and extractive supply chains. No single method provides complete assurance—effective systems combine multiple approaches.

Sources

Grand View Research. (2024). Digital Product Passport Market Size Report.
MarketsandMarkets. (2024). Digital Product Passport Market Forecast.
Research Nester. (2024). Blockchain for Supply Chain Traceability Market Analysis.
Straits Research. (2024). Digital Product Passport Software Market Report.
CDP. (2024). Global Climate Disclosure Report: Scope 3 Data Quality Analysis.
European Commission. (2024). Ecodesign for Sustainable Products Regulation Technical Documentation.