Digital Product Passport’s Impact on the Battery Industry
The demand for batteries is unquenchable. The industry is projected to reach USD $322.2 billion by 2030.1 To meet the demand for more power, as well as the challenges manufacturers and businesses face, seems unsurmountable—considering supply chain issues, regulatory changes, more sustainable materials, navigating the geopolitical spectrum, scaling to meet demand, competition, business innovation, plus the 2022 proposal by the European Commission (EC) to make digital product passports (DPP) mandatory within the European Union (EU) by 2030.
What is a digital product passport?
A passport is a digital record that stores detailed information about a product’s lifecycle including its materials, origin, manufacturing processes, environmental impact and recycling information. This information enables consumers and businesses to easily access the information by scanning a barcode or QR code. This helps ensure that products like batteries are produced, used, and recycled in a way that maximizes resource efficiency and minimizes waste. The regulation includes strict limits on harmful substances such as mercury, cadmium, and lead to minimize environmental and health risks.
Which industries are affected by DPP?
The battery industry isn’t the only industry having to comply with the new DPP regulation. Most vertical industries from chemicals, electronics, and plastics to textiles will require a DPP by 2030.
Despite DPP being driven by the EU, it’s not just European-based companies that will utilize passports. Any product that enters the EU market must comply with the related legislation—products will have to carry an associated DPP even if the company is registered in non-EU territories. With that in mind, it’s possible a U.S. equivalent to a digital passport could be in the works to help satisfy consumer demand for supply chain transparency and circular products.
Batteries are the first industry to be DPP compliant
The battery industry was chosen as the first industry to implement DPP because of its significant environmental impact, complexity of supply chains, and projected growth. Batteries, particularly those used in electric vehicles (EVs) and industrial settings, have a significant carbon footprint and require detailed tracking of various materials from extraction to recycling.
Phase one: Carbon footprint reporting
By starting with the battery industry, digital passports can set the benchmark for other sectors to follow through on promoting sustainability and a transparent approach to product lifecycle management. The first phase introduced by the EU Battery Regulation starts February 2025. The regulation requires battery manufacturers to declare the carbon footprint of EV batteries, industrial batteries, light transport batteries (such as e-bikes and scooters), and rechargeable industrial batteries.2
By 2027, batteries must comply with maximum carbon footprint thresholds, which will tighten over time to push manufacturers toward more sustainable production processes and to encourage a circular economy. The EU Battery Regulation also mandates specific minimum percentages of recycled materials in batteries such as nickel, lithium, lead, and cobalt. According to the latest forecast, the battery industry is expected to have their passports ready by February 2027.
How Will the Battery Industry Meet DPP Requirements?
The EU Battery Regulation continues to define the DPP requirements and standards framework challenging manufacturers and companies to address nearly 101 different battery attributes for the battery product to be passport compliant.
The role of PLM in battery innovation
To meet the battery attribute requirements, businesses are using product lifecycle management (PLM) to design innovative products, promote component reuse, reduce waste at the manufacturing stages, and manage DPP compliance.
PLM’s BOM Management, Document Management, Requirements Management, and Supply Chain Collaboration capabilities are helping battery businesses prepare for DPP by:
- Increasing transparency in the supply chains for faster decision-making
- Innovating new ways to recycle/reuse that’ll drive the circular economy
- Managing a comprehensive product record in a single source
- Organizing DPP attributes and meeting current EU regulations
- Managing the bill of materials (BOM)– from customer information to suppliers
- Restructuring processes and process requirements to be more sustainable
- Supporting sustainability in the earliest stages of product design
A holistic approach to managing your entire battery lifecycle
While the demand for more power seems never-ending,—PLM can help you manage your product lifecycle processes, aggregate your DPP compliance information, and strategically transition your business to a circular economy.
Cloud-native solutions like Arena PLM link new product development, quality activities, and change processes to the complete product record. They manage all your revision-controlled information including the information you make publicly available to support transparency and compliance. This provides a holistic approach for battery companies to efficiently manage product development processes across an extended supply chain.
Arena easily integrates with upstream and downstream systems such as enterprise resource planning (ERP), manufacturing execution systems (MES), and lifecycle assessment (LCA) to ensure seamless data flow and consistency across all stages of a product’s lifecycle. This integration helps maintain accurate and up-to-date information, which is essential for meeting DPP requirements.
George Lewis, Vice President of Product Strategy for Arena by PTC, said, “PLM serves as the backbone for DPP by centralizing and managing essential product information throughout its lifecycle. Additionally, Arena’s cloud-native architecture enables supply chain collaboration which is essential to gathering critical information from across the extended enterprise.”
PLM not only helps with sustainability goals but also provides more transparency that can foster a circular culture of recycling, and reusing.
Learn more about how Arena can help you prepare for DPP mandates and create more circular and sustainable batteries while driving innovation and, faster time to market.
Sources Cited
Joseph Prock