Digital Product Passport: Europe will soon read our labels

In 2029, European consumers could scan a code on a Pakistani bedsheet and expect detailed information about its journey from cotton field to finished product. This future scenario is envisioned by the EU's Digital Product Passport (DPP), which is set to apply to textiles in late 2027. The responsibility for providing this data falls on brands and importers, who must obtain information from the mills and suppliers that produced the goods.

Pakistan's exports to the EU have made a significant impact, accounting for around $17.93 billion of textile exports in FY2025-26, representing a modest 0.26% increase despite a 5.9% drop in national exports. Textile exports alone reached $17.93 billion, but the industry's success depends heavily on data transparency. The DPP asks three crucial questions of every exporter: where was the product made, what energy was used, and can each supplier in the supply chain verify its contribution.

Pakistan excels in providing the origin information, as many exporters purchase local cotton and process it within their own group. However, the nation's energy usage is a mixed bag, with a relatively high percentage of low-carbon sources, but tariffs on renewable electricity remain higher compared to its competitors. Additionally, the sector faces challenges in verifying the origin of fuel used in dyeing and finishing processes, as biomass is largely used informally.

The industry's small and medium enterprises (SMEs) are particularly vulnerable, as they lack the infrastructure and financial backing to produce the required data. For Pakistan to fully leverage the benefits of the DPP, stakeholders including brands, suppliers, and the government must collaborate to overcome these hurdles and turn the passport into a competitive advantage.