Sharing information between actors with the help of product passports offers many advantages. However, it is vital that the EU’s product passport is designed in such a way that it promotes and does not harm the competitiveness of European business.
The European Commission is currently preparing to introduce so-called product passports. It is supposed to provide digital information about products, for example about what materials are included in products and how products can be recycled and repaired. This information aims to facilitate the work of producers and other actors in the circular value chain, help consumers to make informed choices, and support the work of market surveillance authorities and thereby enable a sustainable, circular economy and ensure sustainable product management. Work is currently underway to determine what information should be included in the passports.
The Confederation of Swedish Enterprise believes that digital product passports, correctly designed and synchronized with, for example, voluntary industry systems, could certainly contribute to facilitating the circular economy and circular business models. Used correctly, digital tools can enable the sharing of information between actors in the value chain and help companies improve transparency. Greater information about products for consumers and customers to enable them to make informed choices is also to be welcomed.
However, it is very important that product passports are designed in such a way that they promote and do not harm the competitiveness of European business. There are several key aspects to consider here. One is to ensure that trade-secrets is handled securely – if such information is even to be included in the passports. For many companies, trade secrets are one of the most effective ways to achieve and maintain competitive advantage. The importance of companies’ knowledge-based assets is also why the European Commission has developed an action plan for intellectual property rights as part of its industrial strategy. Lack of sufficient protection for knowledge-based assets affects companies’ incentives to invest in innovation.
Another aspect is that reporting must be in proportion to the benefits such information will add in terms of, for example, selection and use of products and established environmental and safety requirements. Sharing data about products can be technically and legally difficult for companies. To avoid excessive administrative burdens, especially for small and medium-sized enterprises, information included in product passports should be of a “need to know” nature rather than “nice to know”.
A third issue is that effective market surveillance needs to be established and include imported products. It is vital that market surveillance is carried out on the information provided in product passports to ensure a level playing field in the internal market. At the same time, as more product requirements are established in the EU’s internal market, market surveillance needs to be increased accordingly.
Read Swedish Enterprise’s views on the upcoming European product passport in the position paper below.
EUSustainable productsProduct passportsCompetitiveness