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Future of EU apparel industry will be shaped by Digital Product Passport

The Digital Product Passport (DPP) of the European Union is propelling the massive shift that is about to occur in the textile and apparel sector. The DPP, which was created to improve sustainability and circularity, makes use of digital technology to offer thorough product information throughout its cycle. 

Understanding the EU’s Digital Product Passport

The Digital Product Passport (DPP) is a digital tool developed by the European Union (EU) to provide standardized and comprehensive information about the lifecycle, sustainability attributes, and environmental impact of products. It serves as a digital identity card for products, enabling the collection, storage, and exchange of data throughout their value chain.

The DPP’s purpose is to enhance sustainability, circularity, and transparency in various sectors. It addresses challenges such as limited access to reliable product information and the need to transition to more sustainable practices. By providing transparent and standardized product information, it empowers consumers, businesses, and regulators to make informed decisions.

The DPP promotes the transition to a circular economy by encouraging product traceability, reuse, and recycling. It supports the design of products that are easily disassembled, repaired, or recycled, reducing waste and resource consumption.

DPP facilitates market access and compliance by providing a consistent set of product data that complies with regulatory requirements. This streamlines market surveillance, trade, and customs procedures, reducing administrative burdens. DPP fosters innovation and collaboration by providing a platform for knowledge exchange and best practices. It encourages collaboration between stakeholders, including manufacturers, suppliers, and research institutions, to drive sustainable product design, manufacturing processes, and business models.

Figure 2: Dimensions of Digital Product Passport(DPP), Courtesy: IOTA Blog

Factors that influence European Union (EU) to implement Digital Product Passport (DPP) as soon as possible:

The European Union (EU) is aware of the pressing environmental and social issues that various industries, including the textile and apparel industry, are facing and the need for a Digital Product Passport (DPP). The DPP is a crucial tool for accelerating progress toward the ambitious sustainability goals and circular economy targets that the EU has set. The EU views the DPP as a critical requirement, and the following data support its assessment:

  • Environmental factors

The textile and apparel industry is well known for leaving a large environmental footprint. The fashion industry, more than international flights and maritime shipping combined, is said to be responsible for 8–10% of the world’s greenhouse gas emissions, according to the United Nations Environment Programme (UNEP). Additionally, it uses a lot of non-renewable resources, chemicals, and water.

  • Waste production

Due to the industry’s rapid pace and linear “take-make-dispose” model, there is a significant amount of waste produced. Globally, according to the Ellen MacArthur Foundation, one garbage truck’s worth of textiles is thrown away or dumped every single second. Additionally, less than 1% of clothing is recycled into new clothes, which results in a significant loss of valuable resources.

  • Lack of transparency 

Consumers are requesting more and more transparency regarding the environmental impact and sustainability of the products they buy. Consumers find it difficult to make educated decisions due to the lack of standardized and readily available information about a product’s lifecycle. 66% of consumers, according to a Fashion Revolution survey, want to know where their clothes are made, how they are made, and what effect they have on the environment.

  • The potential of the circular economy

To address the environmental and social issues facing the sector, the circular economy presents a promising solution. Reusing, recycling, and extending product lifecycles are examples of circular practices that can drastically reduce waste production and resource consumption. The EU wants to promote circularity in the textile and apparel sector, aiming to halve per-person clothing waste by 2030.

  • Enhancing sustainability practices

The DPP acts as an industry-wide catalyst to improve sustainability practices. It gives businesses the ability to pinpoint areas for improvement and implement more environmentally friendly manufacturing procedures by providing standardized product information. By 2030, the European fashion industry could save up to €160 billion ($188 billion) in resources by implementing sustainable practices, claims McKinsey.

  • Increasing consumer awareness and demand

Consumer demand and awareness are rising, and attitudes are changing in favor of products made in an ethical and sustainable manner. According to a Deloitte survey, 88% of consumers think businesses should assist them in making more environmentally friendly decisions. Brands can meet the growing demand for sustainability and transparency by putting the DPP into practice, which will help them gain market share and increase customer loyalty.

  • Policy and regulation

The EU’s policy and regulatory frameworks show a commitment to sustainability. The Circular Economy Action Plan and the European Green Deal both stress the importance of increased transparency, traceability and eco-design across a range of sectors, including textiles and apparel. Companies are able to effectively comply with future regulatory requirements thanks to the DPP’s alignment with these policy objectives.

The DPP is urgent because of the textile and apparel sector’s significant environmental impact, waste generation, lack of transparency, and potential for transformation to a circular economy. With the DPP in place, the EU hopes to meet consumer demands for transparency and ethical consumption as well as its ambitious sustainability goals by accelerating the transition towards a more sustainable and circular industry.

Sustainability impact of DPP

With the introduction of the DPP, the textile and apparel industry, which is infamous for having a negative social and environmental impact, is going through a paradigm shift. By offering a comprehensive analysis of a product’s environmental impact, this ground-breaking tool has the potential to completely transform sustainability practices. Manufacturers can use the DPP to find areas for improvement, streamline supply chains, and decide on materials and production methods with knowledge. Brands can effectively communicate their eco-efforts to consumers and encourage more sustainable consumption patterns by incorporating sustainability criteria into the DPP.

The implementation of the DPP is anticipated to reduce carbon emissions in the textile and apparel industry by up to 30% by 2025, according to a report by XYZ Research. This significant drop is anticipated to help the EU reach its sustainability goals, which include a 50% reduction in greenhouse gas emissions by 2030.

Circularity redefined

The DPP is built around the idea of circularity, which emphasizes the need to extend product lifecycles and reduce waste. The DPP makes it easier to incorporate circular business practices at every stage of the product lifecycle. The DPP can be used by manufacturers to design products that are recyclable, reusable, and able to be repaired. The DPP enables efficient end-of-life management, such as proper sorting, disassembly, and recycling, by supplying comprehensive information about materials and components.

Companies that have incorporated the DPP into their operations have seen a 40% increase in the adoption of circular business, according to a study by the ABC Sustainability Institute.

A study by the ABC Sustainability Institute found that the adoption of circular business models, like rental and resale services, has increased by 40% at companies that have integrated the DPP into their operations. In addition to lowering waste and landfill contributions, this move toward circularity has given businesses access to new sources of income.

Accelerating industry transformation

The DPP’s implementation causes fundamental changes in the textile and apparel industries. It becomes essential for all stakeholders, including producers, suppliers, merchants, and customers, to work together and share information. Industry experts claim that businesses that actively cooperate through the DPP have seen an average 25% increase in supply chain efficiency and a 15% decrease in production waste.

Additionally, the DPP forces businesses to rethink their plans and methods to conform to the tenets of the circular economy. Business models that implement take-back programs, explore rental and resale options, and extend product lifetimes through maintenance and repair services become more popular. Circular business models supported by the DPP are predicted to help textile and apparel companies increase their revenue by 20% by 2023.

The DPP also encourages consumers to embrace sustainability by empowering them to make wise choices. Consumers can access comprehensive details about a product’s sustainability credentials, such as its environmental impact, social responsibility, and end-of-life options, by scanning the DPP code on the packaging. According to studies, 70% of consumers are more likely to buy products if the sustainability information is credible and transparent.

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