What is a digital product passport for critical raw material reuse and recycling?
Critical raw materials are materials that are important to the EU both economically and strategically. Many of them are in shortage and others have a huge impact on the environment.
For example, raw materials like lithium, cobalt, indium, and neodymium have a significant impact on the transition to zero-carbon energy as they are key to the manufacture of batteries and other renewable technology.
Meanwhile, research shows that out of the 30 critical raw materials (CRM’s) listed by the EU, around half including indium, gallium, and bismuth have an extremely low recycling rate.
To combat these issues, the European Commision rolled out the Critical Raw Materials Act (CRMA) in March 2023. The legislation aims to ensure ethical and sustainable supplies of CRMs from anybody supplying the EU, along with efficient use of resources and a secondary supply of CRMs from recycling.
This ties into the new circular economy action plan unveiled in March 2020, which involves Digital Product Passports (DPPs).
These are designed to increase the transparency and traceability of CRMs throughout their full lifecycle. They encourage accountability, recycling, and reduced reliance on virgin sources which further harm the environment.
Who will critical raw materials DPPs impact?
DPPs are an in-depth digital record containing key information about the CRMs used in any product, including origin, manufacturing processes, and environmental impact. This will affect multiple sectors due to the massively widespread use of CRMs.
Some of the impacted areas will include:
- Electronics manufacturers will have to share detailed data on CRMs and other rare earth elements used in their devices..
- The renewable energy sector itself will have to provide detailed information as technologies like wind turbines and solar panels rely on CRMs.
- Automotive OEMs will have to track and share data on materials like lithium and cobalt which are common in modern electric vehicles (EVs)
- Companies mining for CRMs will have to provide transparent information about the ethicality and environmental impact of their extraction operations.
When critical raw materials DPPs will be implemented:
By January 2027, all products containing critical raw materials sold within the EU will require a digital product passport, regardless of where in the world they were manufactured.
How to prepare for Digital Product Passports for critical raw materials?
To comply with upcoming digital product passports for substances of concern, suppliers and manufacturers will have to focus on a few key challenges:
- Conduct in-depth audits of all data related to products that rely on critical raw materials to identify any inaccuracies or gaps.
- Designate a DPP Lead to develop and implement a strategy for ensuring all products remain compliant.
- Improve supply chain transparency by ensuring suppliers provide detailed information about the social and environmental impact of their CRM mining and processing.
- Invest in suitable technology to facilitate the correct implementation of DPPs.
What to look out for in a critical raw materials DPP?
It’s common in modern supply chains dealing with CRMs for manufacturers to be unable to trace the origins of the materials in their products. Materials like cobalt can be pooled together from multiple small-scale sources before being sold in bulk, making it difficult to ensure ethical practices.
Given this complexity, it’s crucial to have DPP systems and processes that ensure strong data visibility, management, and transparency.
The platform on which a DPP is built needs to be user-friendly and easily added to by everybody in the supply chain. It also needs to maintain excellent security and be built from the ground up to ensure compliance with EU regulations.
AuthentifyIt is an all-in-one solution that addresses all of these challenges and more. We’re also experts at navigating the complex field of EU regulation to keep your business compliant.
Book a discovery call to see how we can guide you towards a successful and sustainable future.
