Compliance is no longer a cost of doing business. It’s becoming a decisive competitive advantage

A new question is quietly entering procurement tenders across Europe: “Which verified battery and CO₂ data can you deliver and how fast?”

For many executives, this still sounds like a future concern. In reality, it’s already shaping purchasing decisions today.

From February 2027 onward, the Digital Battery Passport (DBP) will be mandatory in the European Union. It will decide whether a battery and by extension, the products built around it, can be sold in the EU at all.

No passport. No market access.

When data becomes more important than unit price

For decades, procurement followed a familiar logic: price, quality, delivery time. Sustainability was often a “nice‑to‑have”, relevant, but negotiable. The Digital Battery Passport puts an end to this era and it fundamentally changes the rules of competition.

Under EU Regulation (EU) 2023/1542, batteries must carry a digital record detailing composition, CO₂ footprint, raw material origin, performance, lifetime, and recyclability. The result is full transparency and traceability across the entire lifecycle.

In other words, data quality is becoming as important as product quality.

And companies that cannot provide this data will struggle, not in theory, but in practice to compete in the EU market.

This isn’t about reporting. It’s about redesigning products and supply chains.

The objective of the Digital Battery Passport goes far beyond disclosure. The EU is explicitly using it to reshape how products are designed, built, used, recycled and recovered.

Batteries placed on the internal market are expected to be:

• Easier to reuse or repurpose,
• Simpler to maintain and upgrade,
• Economically viable to refurbish,
• Ultimately recyclable at scale.

This is lifecycle thinking, enforced through data. And it’s setting a precedent.

Why the Battery Passport is more than compliance

At first glance, the Digital Battery Passport looks like another regulatory burden. Many organizations still treat it that way but that is actually a mistake.

In the coming years, virtually every manufacturer, importer, and distributor operating in the EU will be forced to engage deeply with digital product passports. Not because they want to but because market access depends on it.

More importantly, the concept is highly transferable. What starts with batteries will not stop there. Electronics, industrial equipment, machinery, and consumer goods are next.

The Battery Passport is a blueprint and the starting point of a much broader shift.

Data is the real asset

Clean, structured battery and lifecycle data do more than satisfy regulators. They unlock entirely new capabilities across the supply chain. As Oleksandra Ostapenko, Head of Product Management for Industry Standards and Regulations in Supply Chain Management, puts it: “Digital product passports will take companies to a new level of transparency and collaboration across the supply chain. They enable new business models not only in the circular economy. Resale, recycling, remanufacturing: all of these become scalable only when the product passport is seen as an opportunity, not a compliance burden.”

The message is clear: competitive advantage will belong to those who move beyond minimum compliance.

What leaders gain from getting this right

Companies that invest early in digital battery and lifecycle data can:

• Identify sourcing risks earlier through reliable, auditable data,
• Accelerate R&D and product innovation with better lifecycle insights,
• Build trust with customers through radical transparency,
• Create profitable second life business models that reduce dependence on costly recycling.

These are strategic levers, not reporting benefits.

Why platforms matter now

This shift cannot be managed with isolated systems or spreadsheets. Product data, partner data, and sustainability data must be connected across organizational boundaries. That requires platforms, not point solutions.

This is where approaches like SAP’s Multi Passport Platform built on SAP Business Network for Asset Collaboration and SAP Integrated Product Development become relevant. Product data, collaboration, CO₂ calculation, and regulatory traceability need to work together, end to end.

Not as a compliance exercise. As an operating model.

The real question executives should ask

The Digital Battery Passport is already influencing procurement decisions and investment strategies. Quietly, but decisively.

The competitive question is no longer just: “Is our product good enough?”

It’s becoming: “Are our data good enough to sell this product at all?”
By 2027, that question will separate market leaders from those locked out of the EU market.
Are your battery data ready or is compliance about to become your biggest supply chain risk?

To learn more about the upcoming Digital Battery Pass, listen to our “The Future of Supply Chain” podcast episode “Beyond Compliance: Digital Product Passports as Strategic Advantage with SAP’s Oleksandra Ostapenko”.