The digital product passport software market allows companies to digitally manage product information and documentation throughout a product’s lifecycle and supply chain. Digital product passports capture important details like materials, components, environmental impact certifications and recyclability/reuse parameters. This helps ensure products and materials are ethically sourced, safely manufactured and can be traced in the supply chain. Digital passports also help companies comply with emerging sustainability, circular economy and supply chain transparency regulations more efficiently.
The Global Digital Product Passport Software Market is estimated to be valued at US$ 991.8 Mn in 2024 and is expected to exhibit a CAGR of 26% over the forecast period from 2024 to 2031.
Key Takeaways
Key players operating in the digital product passport software market are Billon Group Ltd, CIRCULARISE, CIRPASS, Det Norske Veritas Group, iPoint-systems GmbH, Kezzler AS, LyondellBasell Industries Holdings B.V., Narravero GmbH, OPTEL GROUP, Protokol, PSQR, Qliktag Software Inc., Scantrust SA, Spherity GmbH, and THE ID FACTORY SRL.
The growing demand for digitally managing product compliance and supply chain transparency is a major factor driving growth of Digital Product Passport Software Market Demand. Industries are under increasing pressure to demonstrate ethical sourcing, sustainability and provide end-to-end supply chain visibility to customers. Digital product passports address these challenges effectively.
The global digital product passport software market is also expanding as international regulations around supply chain compliance increase. More countries and trade blocs are implementing regulations on conflict minerals, chemical disclosure, fair labor practices and circular economy. This is motivating companies operating globally to adopt digital product passports to efficiently meet diverse compliance needs across regions.
Market drivers
The increasing focus on sustainability, circular economy initiatives and supply chain transparency regulations are major drivers for the digital product passport software market. Regulations like REACH and RoHS mandate chemical and materials disclosure. Initiatives like the EU Green Deal promote eco-design, circular business models and reuse/recyclability. Companies need digital solutions to streamline compliance reporting and demonstrate stewardship of raw materials and products holistically. This drives increased adoption of digital product passport software globally.
Impact of Geopolitical Situation on the Growth of Digital Product Passport Software Market
The current geopolitical situation characterized by rising geo-political tensions and trade wars is impacting the growth of the digital product passport software market. With rising protectionist policies being adopted by major economies like the US and China, global supply chains are becoming more fragmented. This is encouraging companies to focus on local sourcing and manufacturing to reduce their dependency on imports. Digital product passports allow tracking products throughout their lifecycle from production to end of use and enable verification of components’ origin. Hence digital product passport solutions are gaining adoption to comply with stringent rules of origin requirements and enable verification of local content percentages mandated by governments.
However, the increasing global political instability and uncertainty caused by the Russia-Ukraine conflict is disrupting supply chains and international trade. It is also leading to rise in commodity and raw material prices globally which is increasing operating costs for companies. This can negatively impact their investments in new technologies in the short term. To overcome such challenges, market players need to focus on partnerships with local players in different countries and regions to establish distribution networks fast. They also need to offer flexible pricing models and financing options toHelp customers seamlessly adopt digital solutions during uncertain times.
European Region Concentration
The European region accounts for the largest share in terms of value for the digital product passport software market currently. This is due to stringent product compliance and recalls regulation landscape in the region. The region houses headquarters of many automobile, aviation, and chemical giants who are early adopters of digital product passports. Countries like Germany, France, UK, Italy etc. have domestic manufacturing bases and developed industrial infrastructure which makes deployment of digital solutions easier. Furthermore, supportive government initiatives for adoption of Industry 4.0 technologies are driving higher investments in digital transformation programs across sectors in European nations.
APAC Emerging as the Fastest Growing Region
The APAC region is poised to grow at the fastest pace for the digital product passport software market during the forecast period. This is owing to relocation of manufacturing facilities to countries like China, India, Vietnam etc. by global firms to take advantage of lower costs. Growing emphasis on sustainability and circular economy practices by APAC governments through initiatives like Extended Producer Responsibility is also driving demand. Moreover, developed automotive, electronics and manufacturing industries along with expanding 4IR adoption in industries across South East Asian nations are supporting the growth. Local government regulations requiring proofs of domestic value addition are further compelling multinationals as well local firms to invest in digital solutions.
Get more insights on Digital Product Passport Software Market