Even fewer (43%) say they are actually ready for DPP, a major new regulatory initiative set to begin in 2027 and transform product traceability and lifecycle transparency across Europe. It applies to any business exporting to the EU.
The findings are part of Forterro’s 2025 research - The Digital Future of the European Industrial Midmarket – which also revealed that around one in five (19%) were unsure whether their business would be affected at all.
The main barriers to DPP readiness identified by UK industrial midmarket companies include the complexity of requirements (47%), a lack of suitable technology to manage compliance, and insufficient internal compliance resources. On average, UK firms expect to spend £28,000 on managing their DPP obligations over the next few years.
“The Digital Product Passport will be to product manufacturing what GDPR was to data — it is that impactful,” Claudia Schmidhäuser, Senior Principal, Product Management, Forterro, said to That's Business.
“But it’s much more than a compliance issue; it’s an opportunity for greater transparency, sustainability and customer trust. We saw what happened when companies weren’t ready for GDPR, and too many UK midmarket firms are still unaware or underprepared. DPP requirements are approaching fast, so companies must act now to ensure their systems and data are ready.”
The DPP - a structured digital record that holds key information on a product’s identity, composition, lifecycle, repairability, and more - is being rolled out in a phased approach, depending on product category. Battery products are expected to begin in 2027, followed by other product categories like textiles or iron and steel. DPP will require detailed digital records of a product’s lifecycle, covering everything from materials sourcing to repair and recycling.
When the regulation is in place, no product without a DPP will be able to be placed on the EU market. Member states will set the exact financial penalty for failure to comply, but it is expected to be up to 5% of annual EU turnover.
Environmental regulation was seen as the area of compliance posing the greatest challenge for UK industrial midmarket firms, while 45% of respondents said that compliance influences their operational and technology purchasing decisions, as businesses seek to stay competitive and avoid potential penalties. Almost half believe compliance gives them a competitive advantage rather than being an administrative burden.
The research also revealed some of the other challenges faced by the UK industrial midmarket. Adjusting to exports in the light of recent US tariffs was cited as the main challenge by around one-third of respondents, reflecting the ongoing trade tensions affecting key industrial goods such as steel, aluminium and vehicles. This was followed by ongoing global economic and political uncertainty and protecting the supply chain.
“It’s a complex world to navigate for midmarket firms that might lack the expertise enjoyed by some of their larger counterparts,” continued Claudia Schmidhäuser, Forterro. “But it’s true that compliance and competitiveness now go hand-in-hand. Whether it’s DPP, environmental reporting, data protection or staying on top of rapidly changing tariffs, the companies that modernise their systems first will gain an advantage in efficiency, visibility and customer confidence. It can take a while to be ready for any new legislation, especially during the preparatory phase, so UK companies should begin now.”
The full report - The Digital Future of the European Industrial Midmarket – can be downloaded here: https://www.forterro.com/en/resource/digital-future-research-report
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