“Don’t panic over arrival of Digital Product Passport’’

The construction industry is facing a radical digital transformation, with major implications for suppliers and wholesalers of building materials. For instance, the announced arrival of a European Digital Product Passport (EU-DPP) is causing panic in several industries.  ‘Unnecessary,’ is the verdict of expert Hans de Gier. ‘There is still too much unclear about when the EU-DPP is coming, which products it will apply to and what the exact requirements will be.’

De Gier is founder and managing director of SyncForce, a Dutch company that helps manufacturers with their portfolio management for new and changing products. This involves managing product data in digital systems in such a way that it can be used for a variety of applications both externally and internally. Think physical or chemical specifications, origin, sustainability, price information, certification, liability and logistics. At the same time, the data must be interchangeable between different systems and properly secured.

According to De Gier, the current panic surrounding the EU DPP is caused by more than 200 IT companies trying to earn from the hype. For example, they offer websites with product data, blockchain-based supply chain tracking or so-called digital twins to check the authenticity of a branded product.

Thus, there is a proliferation of alternatives, but none of these ‘passports’ is an official EU DPP. Indeed, this is still under development and will play an official role in various EU regulations, such as the Ecodesign for Sustainable Products Regulation (ESPR, Regulation (EU) 2024/1781), the Battery Regulation (Regulation (EU) 2023/1542) and the recently revised Construction Products Regulation (CPR, Regulation (EU) 2024/3110).

In addition, there are important European consortia influencing the development of the Digital Product Passport, such as Battery Pass (focused on battery traceability for EVs and industrial applications) and CIRPASS (working on a cross-sectoral data model for textiles, electronics and batteries, among others). Often paid for by the EU, these consortia are developing standards, data structures and prototypes aligned with future legislation.

All these initiatives stress the need for standardised data, but the requirement to have an EU DPP by no means applies to all products. It is also far from clear when that requirement would formally take effect. The European regulatory process is syrupy, and each draft version leads to new amendments and exceptions. Wait and see is the best advice.

One of the concrete changes that suppliers and merchants do face in the near future is the transition from traditional barcodes to QR codes: GS1’s Project Sunrise. This shift will be widely implemented in 2027 and will have far-reaching implications for the way products are tracked.

De Gier explains: ‘The shift to QR codes makes product interaction much more efficient and customer friendly.’ This change offers particular benefits for products that require a lot of customer interaction, such as heating systems or other technical building products. ‘Customers can easily learn more about the product, order parts or request information via the QR code, which improves customer satisfaction and customer loyalty.’

However, the implementation of QR codes will not happen overnight. ‘It requires close coordination between manufacturers, wholesalers and retailers, who will have to acquire new scanning equipment and software. So, there will probably be a transition period where barcode and QR co-exist.’

De Gier believes that thanks to initiatives like this, manufacturers might be able to connect with customers more directly in the future. “They can work directly with the end customer, which could change the role of wholesalers,” he states. “We saw this earlier with the rise of e-commerce in retail, where brands started launching their own web shops.”

Nevertheless, De Gier also sees an important role for merchants in the future, especially if they adapt to digital developments. “They can maintain their position by improving their digital offerings, for example by providing more information and digital tools through online platforms, especially for private label / own products.

Alongside technological developments, suppliers and merchants also need to prepare for stricter laws and regulations, particularly in the area of sustainability. Take the expected Packaging & Packaging Waste Regulation (PPWR): “It has a massive impact on the way companies have to manage and report packaging data.” The regulation require companies to keep track of their packaging materials and ensure transparency, which leads to administrative burdens.

“The management of packaging data isn’t just a matter of complying with the law,” reckons De Gier. “It’s also essential for companies that place a high value on sustainability. ESG reporting is becoming increasingly important, and companies need to be able to report their packaging data accurately. Businesses that are unable to properly demonstrate the sustainability of their products may face problems in the future,” says De Gier.

A significant trend is the integration of artificial intelligence (AI) in product information management. “Many of the current systems, like GS1 and ETIM, record product data in a structured way, but they’re not very interoperable between different systems and industries,” explains De Gier. “AI can help to bridge this gap by translating data between systems, which can lead to better collaboration between suppliers, wholesalers, and retailers. AI also makes it easier to share sustainability data in a way that’s understandable to everyone.”

The future of the construction materials sector is both digital and sustainable. Suppliers and wholesalers need to prepare for changes in both technology and regulations. From the implementation of QR codes for product interaction and traceability to complying with stricter sustainability legislation, the sector faces significant challenges. However, De Gier notes that every challenge also offers opportunities: “Companies that invest in the right systems and technologies can strengthen their competitive position and better prepare for the future.”

Suppliers and wholesalers who are able to embrace technology and sustainability will not only comply with laws and regulations but also lay a solid foundation for a sustainable and customer-focused future in the construction sector.

For more information, visit the SyncForce website.