The Sustainable Products Initiative, included in the new Circular Economy Action Plan and one of the goals of the Green Deal, plans to establish a digital product passport (DPP) that collects data on products' value chain. The objective of the DPP is to promote sustainable production, enable the transition to the circular economy, provide new business opportunities for economic actors, help consumers in making sustainable choices, and enable authorities to verify compliance with legal obligations.
From material passport to product passport
Originating from the construction industry and a crazy idea from Sabine Oberhuber and Thomas Rau (see the interview on RM38), the material passport finally seems to be ready for the big leap.
In fact, the European Commission is planning to introduce a “digital product passport” in the coming months that would serve as an inventory of all materials, components and raw materials used in a product or building, along with information on their location. The goal of such data collection on the composition of goods on the European market is to increase the chances of products being reused multiple times and properly recycled at the end of their life. And on top of that, to give users more information about the supply chain of materials and products that may come in handy at the time of potential reuse or proper routing to waste management facilities.
The sectors and products for which the DPP is designed and where it will be implemented are consumer electronics, batteries, ICT, fashion, furniture, as well as “high impact intermediate products” such as steel, cement and chemicals.
As Sabine Oberhuber, CEO of Turntoo, told us in the past months, “At the moment the discussion in the EU is focused on ways to standardize the information to be stored in the material passport. This is a much-needed first step and it is good that these efforts finally have political support. Support is key in making the materials passport mandatory. The government of the Netherlands, for example, is discussing the possibility of making the materials passport mandatory for every new building starting in 2022. All sectors, not just construction, are realizing the need for material passports so that we can begin what we can call 'material resource management' for our economy”.
Madaster, the register of materials
The digital product passport under consideration by the European Commission relies heavily on the digital infrastructure and five years of experience of Madaster ( https://madaster.com), the “material register”, the first online platform that facilitates the generation and central standardized registration of material passports, now active in several European countries such as the Netherlands, Switzerland, Germany, Norway, Belgium, Denmark. Madaster supports passports on various levels, from material to product to assessing entire buildings, areas and financial value of materials, products and real estate.
The Madaster Foundation was founded in 2017 with the intent to eliminate waste by giving every material in the built environment a documented and recorded identity, based on the principle that "waste is material without identity." The platform generates and records material passports, providing a detailed inventory with information on the quantity, quality, size and locations of all materials, components and products used in a specific building. It also calculates a financial assessment (current and expected future residual value of materials) and a circularity index. Madaster's material passport can be adapted and enriched over time, providing a dynamic repository of building data. Data can also be "archived," resulting in an authenticated, time-stamped dataset that can no longer be modified.
Object registration is done by uploading a file (MS Excel format) or preferably a BIM model, from which the platform automatically structures and sorts the data. Madaster enables intelligent decisions on material reuse after maintenance, replacement, reconstruction or demolition, with the goal of minimizing waste and CO2.
Between finance and privacy: potentials and obstacles for the digital product passport
“The sector with the greatest potential for the introduction of the digital product passport in my opinion is undoubtedly the construction industry,” says Pablo Van Den Bosch, director of the Madaster platform, “While from a qualitative point of view, thinking about the sector that causes the greatest negative impact on our living environment, I think that the greatest positive impact can occur in the chemical sector”.
According to Van Den Bosch, the road to a digital materials passport is not entirely paved: the biggest barrier at the moment is still “the limited willingness to demand a first step towards transparency, by making it mandatory, from all key players in the industry: suppliers, buyers, regulators, etc.”
Indeed, the creation of the digital product passport necessarily also calls into question the issue of data security, privacy and corporate trade secrets. There is a need for companies across the supply chain to sit down together to discuss the crucial information that needs to be shared in order to alleviate concerns that the passport may contain information that violates intellectual property rights.
Even finance is slowly becoming aware of the potential of introducing a passport that collects information and data about the materials in a product. Banks and investors now want their product portfolios to be as sustainable and circular as possible. The fear is to end up with a lot of stranded assets, products or materials that are not energy efficient. Circular products, on the other hand, especially if they have a material passport, always maintain a traceable identity and a material value that is matched by a financial value.
The drivers to accelerate in the direction of circularity are all there. However, it is crucial that governments, and even more so the European Commission, define clear guidelines, otherwise the development of digital passports will still be too slow. What is needed is a joint push from investors, banks and governments, so as to encourage building owners to really invest in circularity and sustainability.
It is no coincidence that a specific call for funding from the European Commission within the Digital Europe Programme is also dedicated to the development of digital product passport prototypes in different value chains.