This data-driven approach is the key to realizing a true circular economy. It makes it possible to turn simple downcycling into high-quality recycling, where valuable secondary raw materials are recovered that can replace virgin materials. This document serves as a strategic guide for companies in the recycling industry to understand and successfully prepare for the technical, process and economic aspects of DPP implementation.

The practical implementation of the DPP will revolutionize operational processes in sorting and recycling plants. The process, which today is still heavily characterized by manual work and rough sensory sorting, will be replaced by an automated, data-driven workflow.

The new workflow in detail:

• Recording: A product arrives on the conveyor belt of the sorting system. An industrial camera or scanner captures the data carrier attached to the product (e.g. a QR code or a digital watermark).
• Identification: The software reads the unique product ID and sends a request to the central EU register.
• Data retrieval: The register forwards the request to the manufacturer's decentralized data repository. The data relevant to the recycler (e.g. material type, polymer type, color code, additives or harmful substances contained) is retrieved in real time via a standardized API.
• Automated decision: The system software analyzes the data in milliseconds and classifies the product. It gives a precise command to the sorting mechanism.
• Targeted sorting: The product is automatically fed into the correct material flow by robotic arms, air nozzles or diverters - whether for high-quality recycling, composting or the safe disposal of hazardous materials.

 

This process has already been successfully demonstrated in several pilot projects. A consortium consisting of Henkel, R-Cycle and Korozo Group, for example, has shown how information about adhesives in flexible packaging can be stored in the DPP to optimize recyclability [1].

 

"The information captured in the DPP enables end-of-life companies to properly manage disposed packaging when it arrives at sorting and recycling centers, which contributes positively to the circular economy and recycling rates," explains Philippe Blank, Head of Circular Economy at Henkel [1].

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In order to be equipped for the DPP, recycling companies need to invest in a specific technical infrastructure. This can be divided into hardware, software and the underlying standards.

 

The Agro2Circular pilot project, in which Digimarc and IOTA, among others, are involved, impressively demonstrates the use of this technology stack for the recycling of agricultural plastics. Here, digital watermarks are used to ensure traceability and to anchor the entire process on a distributed ledger technology (IOTA) in a tamper-proof manner [2].

Investing in DPP capability is not only a necessity for regulatory compliance, but also opens up significant economic potential.

• Increased recyclate quality: Precise sorting enables the production of unmixed, high-quality secondary raw materials. These achieve significantly higher prices on the market than mixed or inferior materials and can replace virgin plastics in demanding applications.
• Efficiency and automation: Automating the sorting process lowers operating costs, reduces the error rate and increases the throughput of the systems. Manual sorting processes, which are slow and expensive, can be reduced to a minimum.
• Improved risk management: The DPP draws attention to the presence of contaminants or substances of concern. These can be specifically removed, which increases occupational safety and prevents these substances from entering the recycling cycle.
• Automated compliance and reporting: The data from the DPP can be used directly for the creation of Extended Producer Responsibility (EPR) reports. This significantly reduces the administrative workload.
• New business models: Recycling companies can position themselves as strategic partners in the circular economy. They can provide manufacturers with valuable data on the recyclability of their products or offer certified recyclates with guaranteed origin and quality.

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The transition to DPP-compliant processes should be gradual and strategic. The Ecodesign for Sustainable Products Regulation (ESPR) came into force on July 18, 2024, the first delegated acts for specific product groups are expected in 2026, with a transition period of 18 months [3].

Phase 1: Short-term preparation (2024-2025)

• Knowledge building & analysis: Form an internal team to familiarize themselves with the requirements of the ESPR and the upcoming delegated acts. Analyze which of the prioritized product groups (e.g. textiles, electronics, packaging) are relevant for your company
• Infrastructure audit: Evaluate your existing IT and systems technology. Which scanners are available? Are your software systems able to communicate with external APIs?
• Market observation & networking: Take part in industry events, webinars and pilot projects. Network with DPP software providers and standardization bodies such as the GS1 Circularity Group.

Phase 2: Medium-term implementation (2025-2026)

• Technology selection: Select the appropriate hardware (scanner) and software platform for your requirements. Carry out initial tests in a pilot line.
• Process integration: Develop the processes for integrating the DPP data into your sorting logic. Train your employees to use the new systems.
• Establish partnerships: Establish closer collaboration with producers and waste generators to optimize data flow and define common standards.

Phase 3: Long-term optimization (from 2027)

• Scaling: Roll out DPP-based sorting to all relevant product streams and facilities.
• Data analysis & business models: Use the data obtained to continuously optimize your processes. Develop new services, such as detailed recycling reports for your customers or the sale of certified premium recyclates.
• Continuous adaptation: Stay flexible to respond to new delegated acts and technological developments.

The Digital Product Passport is much more than a new regulation for the recycling industry. It is the key catalyst that will enable the transition from a linear waste management system to a data-driven, profitable circular economy. Companies that proactively prepare for this change now, invest in the right technology and adapt their processes will not only ensure their compliance, but also secure a decisive competitive advantage in the circular economy of tomorrow.

[1] PlasticsToday (February 2025). Digital Product Passport Optimizes Recycling, Traceability. Available at: https://www.plasticstoday.com/packaging/digital-product-passport-optimizes-recycling-traceability

 

[2] Digimarc (June 2024). Piloting Digital Product Passport for Plastic Recycling. Available at: https://www.digimarc.com/blog/piloting-digital-product-passport-plastic-recycling

 

[3] Tributech (December 2024). Preparing for the ESPR's Digital Product Passport. Available at: https://www.tributech.io/blog/preparing-for-digital-product-passports