{"id":51330,"date":"2025-06-23T22:25:00","date_gmt":"2025-06-23T20:25:00","guid":{"rendered":"https:\/\/www.axfoundation.se\/?p=51330"},"modified":"2025-06-23T23:17:10","modified_gmt":"2025-06-23T21:17:10","slug":"digital-product-passports-enable-a-new-business-logic","status":"publish","type":"post","link":"https:\/\/www.axfoundation.se\/en\/news\/digital-product-passports-enable-a-new-business-logic","title":{"rendered":"Digital Product Passports Enable a New Business Logic \u2013 Are You Ready for the Next\u00a0Requirement?"},"content":{"rendered":"
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\n \"Gustav\n

Gustav Roth is studying Digital Creative at Hyper Island in Stockholm and completed his internship at Axfoundation in the spring of 2025.<\/p>\n <\/div>\n<\/section>\n\n\n

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Insights from Gustav Roth:<\/strong> \u201c10 kg of car cleaning rags for 229 SEK.\u201d<\/span><\/span> That sentence popped up in my feed the other day, courtesy of a discount retail chain. The image showed a bundle of old T-shirts, cut into <\/span>pieces<\/span> and pressed into a package to be sold as disposable <\/span>cloths<\/span>. It <\/span>didn\u2019t<\/span> spark a desire to buy \u2013 it sparked questions. About how we perceive value. About materials. And about the future.<\/span><\/span> Questions that are becoming increasingly relevant as digital product passports are introduced as a tool.<\/span><\/p>\n\n <\/div>\n <\/div>\n<\/section>\n\n\n

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A Symbol of an Outdated System<\/h4>\n

We\u2019re in the midst of a policy and market shift \u2013 where a bundle of rags can represent something far bigger. Where linear business models \u2013 fast and cheap \u2013 are facing growing pressure from both consumers and legislators to change course. Circularity is a buzzword, often used but rarely realized. And a garment still tends to get just one life \u2013 before literally ending up as a rag.<\/span>\u00a0<\/span><\/p>\n

If old T-shirts are worth so little they\u2019re sold as rags \u2013 how can we build business models where garments get multiple lives? This is where digital product passports (DPPs) open the door to a new future. Not just in how we produce clothing \u2013 but in how we design, manage, and communicate its value.<\/span>\u00a0<\/span><\/p>\n

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Digital Product Passports \u2013 A Paradigm Shift Across the Value Chain<\/h4>\n

In less than two years, the EU will introduce mandatory digital product passports \u2013 a tool that will enforce traceability throughout the value chain (ESPR). Starting January 1, 2025, legislation will also require textile waste to be sorted and recycled separately. These are critical steps \u2013 but far from enough. Recycling should always be the last resort, when everything else has failed. It\u2019s technically challenging and resource-intensive. The fashion industry is just the beginning \u2013 digital product passports are likely only the bridge toward a much larger transition.<\/span>\u00a0<\/span><\/p>\n

For producers, this means a sweater is no longer just a product \u2013 it becomes an information carrier. It can show where the fibers were grown, how they were dyed, what materials are included \u2013 and what happens after its last use. This is not an add-on. It\u2019s a new foundation for how business will need to operate within the EU. Design, procurement, repair, circularity, profitability \u2013 what changes when transparency goes from a competitive advantage to a basic requirement?<\/span>\u00a0<\/span><\/p>\n\n <\/div>\n <\/div>\n<\/section>\n\n\n

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\n \"Digital\n

Digital product passports aim to increase transparency and support the circular economy; their implementation is taking place within the EU\u2019s new ecodesign legislation.<\/p>\n <\/div>\n<\/section>\n\n\n

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While the potential of DPPs is significant, they also bring practical challenges. For a small clothing brand with just three employees, in-house production, and a strong sustainability drive, the digital traceability requirements can feel more like a burden than an opportunity. Margins are tight, the tech is new, and energy is limited. Yet it’s often these small players who lead the way \u2013 experimenting with leftover materials, local collaborations, or real transparency. Should they have to pay more than the large ones just to show responsibility? There\u2019s a real risk here: that systems created for sustainability might end up filtering out those who can\u2019t afford to play by the new rules.<\/span>\u00a0<\/span><\/p>\n

So the question isn\u2019t just how the system works \u2013 but who it works for.<\/span>\u00a0<\/span><\/p>\n\n <\/div>\n <\/div>\n<\/section>\n\n\n

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A Shift in Business \u2013 From Sales to Lifecycle Value<\/span><\/h4>\n<\/div>\n
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Designing for quality, reparability, and traceability is no longer a \u201cnice to have\u201d \u2013 it\u2019s a business-critical necessity. At the same time, we\u2019re seeing a new generation of consumers emerge<\/a>. For them, sustainability, authenticity, and functionality are hygiene factors.<\/span><\/p>\n<\/div>\n

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Sure \u2013 according to Svensk Handel, secondhand sales dipped temporarily this year. But the long-term trend is clear: more people are shopping secondhand. It\u2019s gone from being an alternative to a conscious first choice. It\u2019s smart, affordable, and often more desirable than new. To keep this positive trend going, reforms like reduced VAT on reuse are essential.<\/span><\/p>\n<\/div>\n

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We\u2019re also getting more data on what happens to textiles that don\u2019t stay in circulation \u2013 but the picture is still incomplete. Garments exported abroad sometimes end up in informal dumpsites, as shown in IVL\u2019s<\/a> recent report. But how common this is remains unclear. The lack of traceability makes it difficult to follow material flows \u2013 which highlights the need for better systems. If we don\u2019t act now, garments will continue to end up in landfills \u2013 not because they\u2019re worn out, but because of systemic failure.<\/span><\/p>\n<\/div>\n\n <\/div>\n <\/div>\n<\/section>\n\n\n

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When products circulate, value is created \u2013 for business, planet, and customer.<\/p>\n <\/div>\n<\/section>\n\n\n

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When Garments Get Multiple Lives <\/span>\u2013 Business Grows<\/span><\/h4>\n<\/div>\n
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Here lies the opportunity: to make the hidden value of what already exists visible. What if your closet worked like a portfolio \u2013 where each garment\u2019s resale value was as visible as a stock price? That would change not just how we consume \u2013 but how we build business.<\/span><\/p>\n<\/div>\n\n <\/div>\n <\/div>\n<\/section>\n\n\n

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We\u2019ve seen it before in other industries. The music industry shifted from physical products to digital services (Spotify streaming) \u2013 with royalty systems that benefit many stakeholders. The textile industry is facing its equivalent transformation. Clothes are physical \u2013 but technologies like QR codes, AI scanning, and digital labeling unlock traceability, value preservation, and shared ownership.<\/p>\n

Streaming is built on a principle: value lies not in ownership \u2013 but in access, transparency, and accountability. The same logic can apply to secondhand fashion. In a model where value is shared across multiple lifecycles, both the producer and the user win \u2013 the former by building long-term value, the latter by consuming smarter. And there\u2019s a clear customer incentive when reselling a garment becomes easy and profitable. With DPPs and smart platforms, resale can happen with minimal friction \u2013 and every new life a garment gains creates value: for the maker, the repairer, the reuser \u2013 and the next wearer. With the right structures, more people could win \u2013 financially and sustainably.<\/p>\n\n <\/div>\n <\/div>\n<\/section>\n\n\n

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Lock in the Material \u2013 Not the Potential<\/h4>\n

Take the deposit bottle. That fixed cap isn\u2019t just about the environment \u2013 it\u2019s about control. If the material leaves the system, so does the value. The same logic must scale to fashion. Here, digital product passports create a new opportunity: to design business models that keep materials in the loop, rather than lose them after first use. With DPPs, we can lock in both material and value.<\/span><\/p>\n

This might just be the start of a mindset shift toward the early phase of the LCA model \u2013 upstream, long before a product reaches the consumer. If we want to reduce dependence on virgin resources, we\u2019ll likely need a system where material flows are not only traceable and measurable, but able to circulate for longer \u2013 and return meaningfully. Most importantly \u2013 it has to be profitable.<\/p>\n\n <\/div>\n <\/div>\n<\/section>\n\n\n

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From Pilot to Proof \u2013 How ReValue Shows the Way<\/h2>\n
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The idea of profitable circularity via DPPs is no longer just a vision \u2013 we\u2019re testing it in practice. At Axfoundation, we\u2019re leading the <\/span>ReValue<\/a> project together with GS1, Filippa K, and Accenture. We\u2019re exploring how digital product passports can enable entirely new business models in fashion \u2013 where garments get multiple lives, and value is shared across the entire lifecycle.<\/span><\/p>\n<\/div>\n\n <\/div>\n

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Choosing a System That Lasts<\/h4>\n

10 kilos of cleaning rags isn\u2019t about old T-shirts. It\u2019s about everything we\u2019ve invested time, money, and expectations in \u2013 that deserves the chance to last longer. Because quality isn\u2019t just in the material \u2013 it\u2019s in the thought behind it, the ability to repair, reuse, and pass on. We\u2019ve gotten used to fast, cheap, replaceable fashion \u2013 but what we need next is something else. Something that lasts. Digital product passports won\u2019t fix everything \u2013 but they can be the bridge between bad habits and new business logic. A way to see, preserve, and build value \u2013 for real.<\/p>\n

Construction, furniture, industry \u2013 other sectors are likely next as traceability demands, and circular business models move beyond textiles. And no, you can\u2019t carry a house wall to your nearest reuse store. But you can start with what you\u2019re wearing.<\/p>\n\n <\/div>\n <\/div>\n<\/section>\n\n\n

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Contact<\/h2>\n