Why the Digital Product Passport risks failing small firms, and how to fix it

In 2024 the EU mandated Digital Product Passports (DPPs) under the Ecodesign for Sustainable Products Regulation, and has since expanded their scope to cover compliance documentation for toys, detergents and, through the forthcoming Product Act, 30+ sectors. The ambition is considerable — and so, if it is not done correctly, could be the cost. Oxera’s report, commissioned by Amazon and published in November 2026, maps six categories of DPP implementation cost, assesses four mitigation strategies and distils five policy recommendations to keep the scheme’s benefit-cost ratio worthwhile.

Six cost categories, one uncomfortable pattern

Oxera's framework divides DPP expenditure into six categories, ranging from software development to data collection, labelling and personnel costs. A large firm with integrated enterprise systems might spend €150,000 to €500,000 on development and absorb it comfortably. A smaller rival reliant on spreadsheets and manual record-keeping faces a near-complete overhaul of its data infrastructure. The critical point is that much of this expenditure is fixed: building or procuring the software, integrating it with existing systems, hiring or training staff. Among detergent manufacturers, for example, ongoing DPP management alone is estimated to cost each company between €50,000 and €500,000 a year — the equivalent of half a full-time employee at the low end and five at the top. A large producer manufacturing millions of units can spread these costs thinly. A small firm cannot. Per-unit compliance costs therefore fall hardest on those least equipped to bear them.

The data problem

The study's most important operational finding is that the passport itself is the easy part. At the World DPP Summit in Berlin in March 2026, a representative from Sika — a global building materials and industrial chemicals company — estimated that roughly 90% of total DPP effort is attributable to data preparation alone. Oxera's own stakeholder interviews confirm the pattern: the dominant cost is not building a platform but discovering, cleansing, validating and maintaining the underlying product information, much of which still arrives from suppliers in non-standardised formats such as spreadsheets or PDFs. For firms in sectors with long, fragmented supply chains, notably textiles and fashion, this data challenge is formidable.

Uncertainty as a cost driver

Regulatory ambiguity compounds the problem. The ESPR establishes the architecture for DPPs but leaves product-specific requirements to delegated acts, many of which remain unfinalised. Firms cannot scope their investments when they do not know what data fields will be required, at what level of granularity, or whether obligations will expand over time. The rational response, as the study documents, is to wait. However, delayed preparation compresses implementation timelines, raises costs and increases the risk of non-compliance.

Every euro spent could return €1.60 — but only if costs stay under control

The study confirms that DPPs can deliver net benefits, though the balance will depend on how requirements are designed and implemented. A 2025 study by Oxera on DPP benefits found that DPPs in the EU are estimated to reduce compliance costs in consumer electronics by 15%, equivalent to nearly €200m of annual savings. In a 2024 survey by Implement Consulting of over 2,000 European SMEs, 91% said that harmonised labelling and standardised information to consumers throughout the EU would help their company grow. Drawing on the European Commission’s impact assessment for toy DPPs, Oxera estimates that each €1 spent on implementing DPPs could generate €1.60 in benefits. However, if variable costs turn out to be 20% higher than expected, this would fall to €1.30, illustrating how implementation choices directly affect value for money. The implication is that realising the DPP’s full potential depends on keeping costs proportionate, particularly for smaller firms.

Five recommendations, one imperative

Oxera’s five policy recommendations share a common thread — implementation must be designed around the firms that exist, not the firms regulators might wish for:

• Calibrate requirements proportionately, with simplified pathways for smaller operators and verified substitute data where primary data is prohibitively costly.
• Set implementation timelines that reflect genuine differences in firm size, digital maturity and organisational capacity.
• Finalise requirements as early as possible; regulatory uncertainty is not merely an inconvenience but a material cost driver.
• Invest in enabling infrastructure — common data standards, interoperable formats and shared digital platforms — to make compliance affordable for those who cannot build from scratch.
• Establish a formal mechanism for periodic reassessment to guard against regulatory creep: the incremental expansion of obligations without sufficient scrutiny of whether additional data fields generate overall benefits.

The study shows that, done well, the DPP could be one of the EU's most consequential steps towards a genuinely circular economy. Done poorly, it risks burdening the very businesses it should empower.

Equally important, the EU must ensure that the promised benefits of the DPP - greater transparency, stronger consumer trust, better compliance and a more circular economy - are not merely theoretical but are actively delivered and measurable in practice. The DPP will be judged not by its ambitions but by whether it is implemented with the practical realities of small businesses firmly in view.

This article draws on research commissioned by Amazon from Oxera. The findings were developed to inform public policy discussions on the implementation of Digital Product Passports.