·        VDMA: "One-size-fits-all" solution would be the wrong way to go

·        Distinction between consumer and B2B products is key

·        Digital product passport offers opportunities for new business models

Brussels/Frankfurt, 29 March 2022 – The EU wants to allow only sustainable, safe and circular products on the internal market in future. This is envisaged by the upcoming EU sustainable product initiative (SPI), which also includes a revision of the Ecodesign Directive. Product-specific requirements, coupled with a Digital Product Passport, will also have a significant impact on the mechanical and plant engineering industry. Properly designed, they can create potential for new business models with respect to the circular economy. "However, it is crucial that the EU does not aim for a 'one-size-fits-all' solution," emphasises VDMA Executive Director Thilo Brodtmann. "The question of which information and requirements actually improve a product in terms of sustainability and circular economy must be solved individually."

 The VDMA is not only against a general full declaration of products in the new EU initiative. "It is also important to distinguish between consumer products and business-to-business products. Due to current market requirements, capital goods already make a significant contribution to the circular economy through their durability, reparability and recyclability," explains Brodtmann.

Potential opportunities through a Digital Product Passport 

For the mechanical and plant engineering industry, a crucial challenge under circular economy is to overcome the information gap and the associated transaction costs. The idea of making product requirements transparent and traceable on the market with a Digital Product Passport (DPP) offers opportunities if this product passport is properly designed. "Another bureaucratic monster, which would be associated with considerable effort and cost burdens, must be avoided," warns Brodtmann. The goal must be an instrument that is manageable for small and medium-sized enterprises with little data management. Even more important would be that the DPP can be adapted to changing customer requirements. Then it can create real added value for machine builders by helping to develop new (digital) business models and services. "Particularly if it is linked to the Digital Twin, on which mechanical engineering companies are already working, the Digital Product Passport can offer opportunities for our industry and advance digitalisation and the circular economy," summarises the VDMA Executive Director.

A photo of VDMA Executive Director Thilo Brodtmann can be found here.

Do you still have questions? Frederike Krebs, EU Officer for Technical, Environmental & Sustainability Affairs, Frederike.krebs@vdma.org, will be happy to answer them.

 The VDMA represents more than 3,400 German and European companies of the mechanical engineering industry. The industry stands for innovation, export orientation and medium-sized businesses. The companies employ around four million people in Europe, more than one million of them in Germany. Mechanical and plant engineering represents a European turnover volume of around 800 billion euros. With a net value added of around 270 billion euros, it contributes the highest share of the entire Manufacturing sector to the European gross domestic product.