European Green Deal Plan
The European Union has announced, in March, a new bundle of sustainability-focused policy proposals that will expand existing ecodesign rules on energy efficiency by encouraging longer product lifespans. The bloc’s overarching European Green Deal plan has the stated goal of making the region “climate neutral” by 2050.
That mission translates to no net emissions of greenhouse gases within a time frame of (now) just under three decades while decoupling the EU’s economic growth from resource use — aka a shift to a circular economy where products are designed to last longer and also to be easy to disassemble for reuse or recycling at end of life.
The Commission also anticipates it creating “economic opportunities for innovation and job creation”, especially in areas such as remanufacturing, maintenance, recycling and repair. So hot European startups of the future could be in areas like smarter waste management and upcycling.
The latest proposals to slot under the EU’s “green deal” umbrella include an interesting idea for Digital Product Passports — which is part of a wider push to increase product sustainability via a Regulation on Ecodesign for Sustainable Products (aka ESPR). The latter sets new requirements to “make products more durable, reliable, reusable, upgradable, reparable, easier to maintain, refurbish and recycle, and energy and resource efficient”; and looks set to apply across the board from products.
Digital Product Passports by the European Union
Another part of the EU’s plan for revised ecodesign rules includes a proposal to introduce Digital Product Passports to store key data to improve traceability around products and support repair/recycling etc by standardizing the information which product manufacturers must provide.
The Commission also intends these passports to arm consumers with information on environmental impacts to inform purchasing decisions. This could include energy consumption info but also — via new EU Energy Labels for relevant products — a repairability score.
Product-specific information requirements will ensure consumers know the environmental impacts of their purchases
The Commission suggests of the Digital Product Passport plan
“All regulated products will have Digital Product Passports. Digital Product Passports will be rolled out for all regulated products,” the Commission writes. How exactly this will work isn’t clear but presumably something like a QR code could be fixed to each product for scanning to view the associated sustainability data.
The EU is also eyeing the potential for this standardized ‘metadata’ system to create other data-sharing opportunities — which could even lead to other types of business opportunity. Structuring information on the environmental sustainability of products and transmitting it by means of digital product passports will help businesses along the value chain, from manufacturers, importers and distributors to dealers.
“This will also help track the presence of substances of concern throughout the life cycle of materials and products, following through on commitments made in the Chemicals Strategy for Sustainability and contributing to the EU’s aim to achieve zero pollution. Digital product passports can also enable consumers to make more informed choices, improve transparency for public interest organisations and help national authorities in their enforcement and surveillance work.”
Blockchain: the only tool that meets the EU’s Digital Product Passport?
To take full advantage of an innovation, you have to think new. Blockchain technology invites us to do just that. In a nutshell, it is a new way of storing information, preserving it without modification, accessing it and integrating new information that becomes unforgeable. This new data can result from the execution of an operation, a transaction or the “automatic” execution of a computer program (Smart Contract).
They are recorded on the equivalent of a vast “distributed” register, i.e. shared on the computers of all the members of the network, a system that allows transparency and auditability. In such an architecture, the issues of control and security are radically modified.
The blockchain is a system for storing transaction information in digital blocks. The name comes from the fact that blocks contain three key items — time stamped records of valid transactions, a “hash” or digital fingerprint of the block and a hash of the previous block. In this way any block is linked or chained to the previous block thus forming a “Block-Chain”.
Through blockchain’s decentralised ledger system, individuals and corporations can be confident that information on blockchain are auditable and immutable.
One can imagine the magnitude of the changes that such an innovation promises. Technically, it could offer a solution to the weaknesses of centralized systems. Economically, it should make it possible to increase productivity by limiting intermediaries and automating transactions. Institutionally, it is a response to the mistrust to the mistrust of political and economic institutions, with the key to making economic and social relations more fluid. Blockchain is therefore a technology with a bright future. In the wide variety of uses envisaged, two main categories stand out:
- Notary-type applications linked to the keeping of a register that is intended to be shared. Blockchain could change the way transactions are controlled, the way goods are transferred and exchanged between people, and beyond that the certification of industrial or financial processes. In particular, we expect it to be used in the traceability of food products; it could also give rise to secure online voting systems or digital identification of individuals.
- Applications coupling the transactional dimension to the physical world, the so-called “Internet of value“. A transaction can be triggered by direct intervention or by the execution of a computer program that may include specific conditions or verifications, for example on the date or based on information from the physical world. With such “smart contracts”, blockchains open the era of programmable transactions, without the intervention of a trusted third party. These applications aim to create trust where it is lacking or to replace centralized trust mechanisms.
Blockchain: economic and commercial stakes
Logistics, the first candidate? As a register that memorizes all the operations carried out without the possibility of falsification, blockchain is proving to be a revolutionary tool in logistics. The entire life cycle of a product can be certified in this way. The objective is twofold: not only does it allow for the transparency of the supply chain with respect to consumers, but it also secures these supply chains against operational malfunctions or various forms of illicit trade. Several pilots are currently being deployed. This traceability of supply chains, from the manufacturer to the consumer, is primarily of interest to the food industry (controlled origin, respect for the cold chain, etc.), but also to the luxury goods and pharmaceutical industries (fight against counterfeiting).
Transparency and confidentiality. Public blockchains allow the traceability of all operations carried out, in a transparent manner. This characteristic goes against the business secrecy. Because the registry is distributed, the information it contains in clear text is accessible to stakeholders. This is an advantage for ensuring the traceability of transactions, but a redhibitory flaw if information of a business secrecy nature is delivered in this way, for example in finance or health matters.
Conclusion
Beyond these productivity objectives, blockchains are likely to the problem of distrust in our societies, which is not only very costly in a market economy in a market economy, but also politically and socially dangerous. The consumers and citizens are permanently confronted with problems of counterfeiting, food insecurity, programmed obsolescence or inaccessible customer services, counterfeit drugs, criminal financial practices.
