Europe will soon read our labels
Around 2029, a buyer in Europe will scan a code on a Pakistani bedsheet and expect to see where its cotton was grown, which mill spun the yarn, which dyes were used, how much energy went into making it. That is the practical meaning of the EU’s Digital Product Passport (DPP), which will apply to textiles once the relevant delegated act is adopted, expected in late 2027. The legal obligation falls…
By 2029, European consumers will be able to scan a code on a Pakistani textile and view a digital product passport detailing its origins. This EU initiative, the Digital Product Passport (DPP), will be mandatory for textiles and will require brands and importers to provide information about the mills and suppliers involved in the production process.
Pakistan is a significant player in this market, accounting for 30% of the EU's textile imports and contributing 70-76% of the value of those imports. In fiscal year 2025-26, Pakistan earned $8.96 billion from textile exports, with knitwear, readymade garments, and bedwear generating $4.97 billion, $4.29 billion, and $3.11 billion respectively.
The DPP requires exporters to answer three key questions: where the product was made, what energy was used, and whether each supplier in the supply chain can provide proof of their part in the production process. Pakistan has strong credentials when it comes to origin, as many textile companies operate integrated supply chains, with multiple production stages occurring within a single group.
Additionally, Pakistan's electricity grid relies on low-carbon sources, giving its products an environmental edge over those produced in coal- and gas-dependent countries like Vietnam and Bangladesh.
However, Pakistan faces challenges in providing evidence for the energy and supply chain data required by the DPP. The competitive trading bilateral contracts market (CTBCM) aims to facilitate renewable energy purchases for industrial consumers, but the available volume is limited and the associated wheeling charges are prohibitively high for most mills.
Moreover, Pakistan lacks a system of renewable energy certificates and proper fuel standards, making it difficult for textile mills to prove the origin of their steam for dyeing and finishing processes.
The most significant hurdle for Pakistan's textile industry is the limited ability of small and medium enterprises (SMEs) to generate the necessary data for the DPP. These smaller suppliers, which include accessory makers, independent dye houses, and stitching contractors, lack the financial resources and buyer support that larger exporters have.
As a result, if these SMEs cannot produce the required information, they may be replaced by suppliers from other countries, weakening the domestic textile supply chain that serves as the industry's main competitive advantage. To turn the DPP into a competitive advantage for Pakistan, it is crucial for brands, development partners, and government entities to collaborate in sharing the costs of implementing the necessary data systems and renewable energy solutions.
Written by urgent.news from Business Recorder's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
