RMG exports enter EU 'digital passport' era; factories must adopt by 2027

Highlights:

• EU mandates Digital Product Passport for apparel imports by 2027
• Bangladesh must ensure full supply chain transparency or lose market
• DPP tracks product lifecycle, sustainability, and human rights data
• BGMEA launches pilot projects; progress remains at early stage
• Non-compliant factories risk losing European orders and market access
• SMEs face digital, financial, and skill challenges for compliance

As Europe prepares to roll out mandatory digital identification for its apparel imports, enforcing stringent labour and environmental standards, Bangladesh's $39billion garment sector faces an imminent critical choice: ensure end-to-end supply chain transparency or risk losing its largest market.

The European Union (EU) is Bangladesh's premier export destination, accounting for over half of the country's apparel shipments.

The EU's new requirement, known as the Digital Product Passport (DPP), will assign a unique digital identifier (such as a QR code or NFC tag) to each product. This identifier will link to a secure, online record tracking the product's entire life cycle—from its raw materials and production processes to its environmental impact and end-of-life management. This move is designed to uphold sustainability, ethical sourcing, and human rights standards across the supply chain.

BGMEA officials said preliminary steps towards DPP have already begun. "We've launched a pilot project to see how this system can be implemented at the factory level," BGMEA President Mahmud Hasan Khan Babu told TBS.

Sheikh HM Mustafiz, BGMEA director overseeing the initiative, said, "Initially, the DPP will identify and trace all entities involved in the supply chain – a process that has already started in some factories. Over time, we will include additional data, such as water usage, electricity and gas consumption, carbon emissions, other environmental indicators, and human rights information."

Infograph: TBS

Mandate and market risk

The EU is set to make the DPP mandatory for all apparel products exported to Europe starting in 2027, with full implementation expected by 2030.

While initial steps toward DPP compliance are underway, Bangladesh's garment industry leaders warn that full implementation within this tight timeframe will be challenging. Non-compliant factories face the potential loss of European orders.

"One must either become compliant with European standards across the supply chain or leave that market altogether," cautioned Sheikh HM Mustafiz, a Director of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA).

The DPP, which falls under the Ecodesign for Sustainable Products Regulation (ESPR), will introduce a new level of transparency, requiring every participant in the supply chain to adhere to strict standards.

According to BGMEA data for FY25, Bangladesh exported garment products worth about $39.35 billion. Of this, $19.71 billion went to EU countries (excluding the UK). An additional $4.35 billion worth of garments were exported to the UK market during the same period, bringing the total European market share to over 50%.

BGMEA officials said that the policy adopted by the EU – the Ecodesign for Sustainable Products Regulation (ESPR) – mandates digital identification for products exported to EU countries. 

ESPR builds on previous ecodesign directives, requiring products to be more sustainable throughout their life cycle. It focuses on reducing environmental impact by improving design, manufacturing, and consumer use, including energy efficiency and recycled materials.

While the initiative will initially cover apparel products, it will later expand to other sectors, such as leather, electronics, and agricultural products.

How will DPP work?

Under the DPP, every product or batch will be assigned a unique digital ID — such as a QR code, NFC tag, or RFID chip — linked to a secure database that tracks the product's entire lifecycle. This database will contain detailed information about the raw materials used, including their source, origin, and sustainability credentials; the production process, covering logistics, packaging, and carbon footprint; the use phase, detailing repairability, maintenance, and warranty; and finally, the end-of-life stage, outlining how the product can be recycled, disposed of, or reused.

Most garment exporters in Bangladesh are still not fully aware of how the system will operate. 

Independent verification, including audits and certifications, ensures data accuracy. Regulatory bodies, like the EU or national authorities, can access DPP data to check compliance with sustainability or circular economy laws.

Sheikh HM Mustafiz explained, "We, the tier-1 garment manufacturers, will collect necessary information from tier-2 and tier-3 suppliers, including accessory, cotton, and yarn producers. This information, combined with our own production data, will be passed on to the next stage, making the entire supply chain digitally traceable."

Bangladesh at early stage

Exporters said Bangladesh's preparations remain at an early stage. A pilot project is currently being implemented at a factory of Urmi Group under BGMEA.

Asif Ashraf, managing Director of Urmi Group, told TBS, "We have been working under BGMEA's pilot project for about three months, mainly collecting supplier data. Detailed activities will begin later."

He added, "The EU has not yet finalised the full set of standards. This project aims to establish standardisation, which will form the basis for standard operating procedures (SOPs). Traceability will start from the raw materials' origin, with each participant passing their portion of information to the next. The barcode will allow anyone with access to scan and view the data."

"This is a major task," he said, noting that full implementation may not be possible within the initially proposed timeline.

Non-compliant factories risk losing orders

Sheikh HM Mustafiz pointed out that suppliers to most non-compliant factories are often non-compliant themselves, making them unlikely to provide accurate data or cooperate in proper collection. So, non-compliant factories risk losing orders from the EU.

He also highlighted challenges such as the absence of a unified code or single platform for data input, forcing factories to enter information separately – a time-consuming and costly process. Additional manpower may be required, and factories outside the European supply chain may show limited interest.

Mohiuddin Rubel, a former BGMEA director, told a local media outlet, "Small and medium enterprises, which make up a large share of RMG factories, often lack access to digital infrastructure, reliable connectivity, and financing to implement such systems. Traceability and digital compliance also require new skills in data management, lifecycle analysis, and ESG reporting, which are still rare among our workforce."