New research by blockchain & web3 solutions developers Protokol shows a surge in interest amongst textiles companies to get ahead of upcoming upcoming regulations from the European Commission, mandating Digital Product Passports (DPPs) for their industry by 2030.
DPPs are a tool for collecting and sharing product data to illustrate a product’s sustainability, environmental and recyclability attributes. Under the European Commission’s ‘Circular Economy Action Plan’ (CEAP), DPPs will be mandatory for industrial and electric vehicle batteries as soon as 2027 (in the form of a battery passport), before approval of industry-specific policy rolls out to other sectors. Alongside this, the Ecodesign for Sustainable Products Regulation (ESPR), announced in March last year, will introduce DPPs for all of its mandated products over the coming years. One of the sectors feeling the pressure most intensely is the textiles industry, for which DPPs will be mandatory by 2030.
Protokol compiled its own business insights and a variety of data points, showing a 60% increase in inbound enquiries around DPPs for its own business, as well as a 413% increase in news articles mentioning DPPs in 2023 vs 2022. This corresponds with the projection that the circular economy market, worth roughly $339 billion USD in 2022, is forecast to more than double by 2026.
Businesses looking to stay ahead of the trend have caused an uptick in requests from potential customers seeking information about what the ESPR regulation means for them and how best to implement DPPs in their business:
“It’s no surprise organisations of all sizes are starting to prepare now. Creating a comprehensive audit trail means tackling complex details like supply chain collaboration, interoperability, transparency, confidentiality, and staying ahead of evolving DPPs regulations,” said Lars Rensing, CEO of Protokol, “It certainly won’t be plain sailing, especially since so many pieces of regulation overlap in their demands for a DPP and what it should include. The best time to start preparing is now.”
Wider data and industry news points to a particularly strong move from the textiles sector, despite the DPPs deadline being seven years away. This year has seen DPP moves from major fashion and textiles players such as Pangaia, Nobody’s Child and Coach, for example. This comes amid a wider swing towards sustainability in the textiles industry – a report by GlobalData found that “traceability” was the most-used keyword in filings by apparel industry companies over the last five years. As one of the most notorious industries for its lack of sustainability, it is perhaps no surprise that textiles companies are keen to move fast to achieve compliance.
Rensing continued: “The time to act on upcoming regulations is now. Businesses which are already assigning research, taking the time to understand the regulation and researching products and providers will be the best placed to ensure a smooth transition. Beyond regulatory concerns, DPPs also make business sense. Consumer awareness of the impact that the fashion industry has on the climate crisis is at an all-time high, and the textiles industry is notoriously one of the most wasteful industries in the world. DPPs offer textiles businesses an opportunity to turn over a leaf, by creating a transparent and trustworthy way in which they could demonstrate their sustainable credentials to an increasingly conscious customer base.”