Digital Product Passports // How To Turn Compliance Costs Into Innovation Investments

Compellio
6 min readFeb 16, 2023

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Digital Product Passports (DPPs) will soon be required by law in order to help businesses and consumers track the origin of components and raw materials used in all kinds of goods. How can businesses transform these compliance costs into investments for future growth?

👉 TL;DR : Access our new DPP solution by joining our Early-Adopters Program

In this blog post we:

  • Give a quick overview of EU’s plans for Digital Product Passports (DPPs)
  • Discuss how businesses can use blockchain & web3 technologies to manage risks & drive growth with DPPs
  • Invite businesses, institutions, and professionals to access our new DPP solution by joining our Early-Adopters Program.

Digital Product Passports

The European Commission plans to introduce Digital Product Passports (DPPs) to track the origin of components and raw materials used in all kinds of consumer goods. All regulated products will have DPPs. This will ensure that supply chains become more circular and that consumers are aware of the environmental impacts of their purchases.

EU’s Ecodesign for Sustainable Products Regulation [1] as well as the Battery Regulation [2], have outlined the adoption of DPPs with the aim to make durable and repairable products ‘the norm’ in the EU’s single market.

For DPPs to succeed, third-party verification of data is key to ensure transparency across a wide range of materials and products. This regulatory framework presents big opportunities for the introduction of blockchain-related technologies that ensure a chain of trust across supply chains in Europe and beyond.

Next-Gen Tech for Digital Product Passports

Blockchain is increasingly gaining importance not only as a siloed technology for implementing on-chain dApps but also as an infrastructure element in the global internet-based computing landscape (see our joint paper with MIT Connection Science [3]).

In particular, the ability to uniquely identify assets (co-authored with MIT Connection Science [4]) allows easier implementation of traceability and auditability, thus increasing trust and transparency regarding products and processes involving both physical and digital assets.

The ability to protect properties of both digital and physical assets (e.g., intellectual property, product provenance, environmental characteristics) or the efficiency of complex business processes (e.g., cross-border taxation, product certification, asset transfer, etc.) is a major opportunity for blockchain and web3 technologies in general.

Opportunities for better risk management & value creation

  • Reduce counterparty risks from suppliers’ misclaims
  • Prove compliance without revealing sensitive data to competitors or upstream users
  • Improve the security of user access controls for your data & systems
  • Streamline collaboration processes with 3rd parties (e.g. auditors, regulators, etc.)

To unlock these opportunities, new tokenisation paradigms have emerged to support a diverse set of use cases (e.g. non-fungible tokens — aka NFTs — for trading across marketplaces, soul-bound tokens — aka SBTs — for collecting personalised non-transferable assets, etc.).

As the global blockchain tech market is expected to grow to $60 billion by 2028 [5] while the total size of illiquid asset tokenisation would be $16 trillion by 2030 [6], the tokenisation design space will inevitably grow to support more flavors and paradigms in decentralised economic processes [4].

Source: World Economic Forum — Global Agenda Council, BCG Analysis

In addition to the market uptake of blockchain/tokenisation technologies, decentralised identities (DIDs) and verifiable credentials hosted on SSI-compliant wallets are also providing new ways for businesses to interact with consumers as well as manage user authentication in protected IT environments in a more personalised, secure, and trusted manner.

Asset identity tokenisation and decentralised claims (collectively called web3) combined with the power of traditional IT systems (web2) are creating meaningful opportunities to deliver the next wave of innovations for Digital Product Passports.

Leveraging this convergent framework, our team at Compellio has been working with industry leaders to implement a new DPP solution that makes use of our patented digital asset interoperability technology to deliver capabilities that help businesses turn compliance costs into value-adding innovations.

Our DPP Solution For Circular Supply Chains

As a member of the Product Circularity Data Sheets (PCDS) Initiative [7] which is led by the Ministry of Economy of Luxembourg and supported by major international industry leaders, Compellio has taken concrete steps to contribute to Europe’s Green & Digital transition by developing a new Digital Product Passport solution for the Circular Economy that enables out-of-the-box compliance with the upcoming ISO 59040 PCDS standard [8].

Based on this new ISO standard, companies shall describe, for each product, all relevant information in controlled and auditable statements, with the aim to help consumers and manufacturers make educated choices, increase the value of their products, and enable future product uses within circular supply chains.

In order to help companies comply with the ISO standard in a fully interoperable manner, Compellio provides a trusted PCDS DPP system that addresses the difficulty for industry and consumers to access reliable data on the circular properties of a product.

Combination of DLTs, Verifiable Credentials, and Self-Sovereign Identities (SSIs) to deliver open and interoperable Digital Product Passport management services (the graph above shows an instance of the service applied to the PCDS use case)

Our PCDS DPP solution uses:

  • blockchain-enabled verifiable registries
  • PCDS data and audit certificates
  • verifiable credentials for PCDS-related assets

while leveraging self-sovereign identity (SSI) components via an EBSI-compliant wallet, to ensure trusted authentication, auditability, and data access services in Europe and beyond.

Instance of an accredited user’s credentials (PCDS Agent Certificate) providing decentralised access controls to authorised DPP management modules

Our GDPR-compliant solution is offered as cloud-based SaaS (Software as a Service) with plug-and-play API connectivity for enterprise systems and on-premise deployments.

Recognising the impact of this web3 solution on EU’s digital transformation and sustainability goals, Compellio’s Digital Product Passport has been selected as a winner by EU’s Next Generation Internet program [9] led by the eSSIF Lab which looks for interoperable SSI working applications for real-world challenges and opportunities in e-Government.

Join our Early Adopters Program

We are now welcoming applications (via this link) from industrial companies, auditors, and institutions active in circular supply chains that wish to use our Digital Product Passport solution, drive connectivity with their own IT systems, and adapt it to their unique business processes.

With our DPP solution, our vision is to facilitate an open, transparent, and trustworthy ecosystem for circular product compliance globally.

About Compellio

Compellio is an acknowledged provider of global infrastructure components for bridging the gap between traditional IT systems and web3 computing. Headquartered in Luxembourg, Compellio offers a patented technology used by industry leaders and major public institutions to deliver cutting-edge services in several market verticals including product traceability, audit, e-government, fintech, compliance, and more.

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Compellio

Compellio is an acknowledged provider of global infrastructure components for bridging the gap between web2 & web3 computing.