The Forterro study - The Digital Future of the European Industrial Midmarket - shows that only 43 percent of the UK industrial midmarket is ready for DPP compliance, with regulatory complexity and lack of resources hindering progress. Fewer than 47 percent of UK manufacturers and wholesalers are even aware of the DPP and what it entails, with even fewer (43 percent) being actually ready for DPP.
The DPP will transform product traceability and lifecycle transparency across Europe when it comes into effect in 2027. It applies to any business exporting to the EU.
With regard to batteries, each battery will be required to have a unique, tamper-proof, blockchain-verified digital identity (a ‘digital twin’) that records its entire history, including manufacturer details, manufacturing location, and batch information.
Manufacturers must enable supply chain transparency by disclosing information on the origin of raw materials, such as lithium, cobalt, and nickel.
From February 2025, manufacturers must calculate and disclose the carbon footprint of their batteries, with strict, tightening maximum thresholds introduced by 2027.
The DPP will track compliance with mandatory minimums for recycled materials, such as cobalt, lead, lithium, and nickel, starting in 2031.
The passport will contain data on the battery's composition and state-of-health (SoH), making it easier for recyclers to dismantle and recover materials. Detailed performance data will help identify batteries that are still functional for second-life applications (such as energy storage systems) before being recycled.
The DPP will log data on charging cycles, temperature, and overall health, allowing for better monitoring of battery durability.
Detailed information about the presence of hazardous substances will be mandatory to minimise environmental risks, as will information on safety measures, dismantling procedures, and extinguishing agents.
This will require a complete overhaul of data management, with companies adopting new IT systems to collect, manage, and securely share vast amounts of data across the value chain. This may be complex for Small and Medium Enterprises (SMEs).
Before being placed on the market, batteries must have a third-party verified declaration of conformity, making compliance a major part of the production process.
Embracing the DPP early will enable companies DPP to differentiate themselves through transparency and sustainability, using it to build trust with consumers and investors.
Carbon footprint declarations are already required for EV and industrial batteries, this stipulation being implemented in February this year. Mandatory Digital Battery Passports for EV, industrial (>2kWh), and LMT batteries will come into effect on 18th February 2027 and minimum recycled content requirements for cobalt, lead, lithium, and nickel will be required from 18th August 2031.
The main barriers to DPP readiness identified by UK industrial midmarket companies include the complexity of requirements (47 percent), a lack of suitable technology to manage compliance, and insufficient internal compliance resources. On average, UK firms expect to spend £28,000 on managing their DPP obligations over the next few years.
“The Digital Product Passport will be to product manufacturing what GDPR was to data — it is that impactful” said Claudia Schmidhäuser, Senior Principal, Product Management, Forterro. “But it’s much more than a compliance issue; it’s an opportunity for greater transparency, sustainability and customer trust. We saw what happened when companies weren’t ready for GDPR, and too many UK midmarket firms are still unaware or underprepared. DPP requirements are approaching fast, so companies must act now to ensure their systems and data are ready.”
The DPP - a structured digital record that holds key information on a product’s identity, composition, lifecycle, repairability, and more - is being rolled out in a phased approach, depending on product category. Battery products are expected to begin in 2027, followed by other product categories like textiles or iron and steel. DPP will require detailed digital records of a product’s lifecycle, covering everything from materials sourcing to repair and recycling.
When the regulation is in place, no product without a DPP will be able to be placed on the EU market. Member states will set the exact financial penalty for failure to comply, but it is expected to be up to 5 percent of annual EU turnover.
Environmental regulation was seen as the area of compliance posing the greatest challenge for UK industrial midmarket firms, while 45 percent of respondents said that compliance influences their operational and technology purchasing decisions, as businesses seek to stay competitive and avoid potential penalties. Almost half believe compliance gives them a competitive advantage rather than being an administrative burden.
Forterro’s research also revealed some of the other challenges faced by the UK industrial midmarket. Adjusting to exports in the light of recent US tariffs was cited as the main challenge by around one-third of respondents, reflecting the ongoing trade tensions affecting key industrial goods such as steel, aluminium and vehicles. This was followed by ongoing global economic and political uncertainty and protecting the supply chain.
“It’s a complex world to navigate for midmarket firms that might lack the expertise enjoyed by some of their larger counterparts” added Ms Schmidhäuser, Forterro. “But it’s true that compliance and competitiveness now go hand-in-hand. Whether it’s DPP, environmental reporting, data protection or staying on top of rapidly changing tariffs, the companies that modernise their systems first will gain an advantage in efficiency, visibility and customer confidence. It can take a while to be ready for any new legislation, especially during the preparatory phase, so UK companies should begin now.”
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