Author: Inci Hazal Kılıç

For years, we have been discussing corporate commitments, emission targets, and overall strategies of companies as those sitting on the other side of the table in the world of sustainability. However, today the direction of the winds blowing in industrial facilities and export ports has changed. The focus has now shifted from the chimneys of massive factories to a single product coming out of that factory, even down to the molecules of that product. The trade rules rewritten with the European Green Deal send us a very clear message. Regardless of how strong your corporate reputation and trade volume might be, if the product you produce does not have a "sustainability passport," you may be left out of the market.

The mindset of "I sold the product, my responsibility is over" has disappeared with the enactment of the Border Carbon Adjustment Mechanism (BCAM). In fact, the entire process that we define in literature as "Cradle-to-Grave," from the extraction of raw materials to the end of the product’s life cycle when it becomes waste, has now become a direct responsibility area for the producer.

We can say that modern product sustainability, which we frequently emphasize in our consulting processes, actually relates to three important areas:

1. Circularity,

2. Life cycle impacts, and

3. Healthy materials.

Among these, we particularly see circularity as the most important, aiming to rescue a product from the classic "use-and-dispose" economy by preserving the value of materials through the “3R” approach, which stands for reduce, reuse, and recycle, keeping it in the system as long as possible while minimizing waste.

However, there is a very critical point that our industrialists must not overlook at this point, referred to as “Burden Shifting.” If you are trying to reduce a product's carbon footprint while increasing water consumption or using toxic chemicals to make the product more durable, you are not solving the problem; you are merely transferring it to another stage of the life cycle. That is why a holistic Life Cycle Assessment (LCA) is an analysis whose importance is growing day by day.

Products Without Data May Get Stuck at Customs

In the upcoming period, the most challenging issue for Turkish exporters will be the deep chasm between "intention" and "evidence." The European Union's Digital Product Passport (DPP) implementation and regulations like Ecodesign for Sustainable Products Regulation (ESPR) are now demanding transparent and verified data regarding the product’s content from us.

If you do not control the data at the very end of your supply chain under these regulations, no matter how high-quality your product is, you risk being excluded from the European market. Especially under the EU’s “Extended Producer Responsibility (EPR)” framework, producers are now financially and physically responsible for the collection, recycling, and disposal of their products. This means the waste cost of the product you produce is becoming a line item that directly affects your balance sheet.

Not Just a Passport

I want to emphasize that the data infrastructure you will establish for preparing a digital passport will also form the backbone of all other reporting that your company must undertake. When you digitize the recipe of your product and supply chain data for the digital passport, you will also be able to use the same parameters in BCAM reporting or Environmental Product Declaration (EPD) certifications. In fact, every step you take towards the digital passport will serve as a preparation for all sustainability data that your trading partners in EU countries might request.

If you think we have more time on this subject, it would be beneficial to take another look at the upcoming schedule. Because the processes under the ESPR framework have already begun. Implementation details for critical sectors such as iron, steel, aluminum, textiles, and tires are expected to be published with delegated acts in 2026 and 2027. Moreover, we know that the obligation for a battery passport for industrial (>2 kWh), EV (electric vehicle) and LMT batteries will also start in 2027. By 2030, the ESPR will gradually cover the vast majority of consumer products in the EU market. The scope of the ESPR will expand to include "almost all physical products" (with some exceptions), but which product groups will have which obligations in which year is being gradually determined by delegated acts.

One frequently asked question is whether Turkey's Environmental Label Regulation is the same as the EU's Digital Passport application. Although both are based on the life cycle approach, their commercial functions differ. It would be more appropriate to say that the Turkish Environmental Label system is a model compatible with the EU Eco-Label Regulation rather than a digital passport approach.

Waiting is the Most Expensive Strategy

There is a dangerous situation we often observe in the industry: waiting for regulations to fully come into effect. However, waiting until the legislation is at the door to take action is the most costly strategy. This results in delays in production, significant redesign costs, and market losses. In this period where greenhouse gas emissions from applications like BCAM are now a cash cost item, taking early action will serve as a financial shield for businesses.

Product sustainability should be viewed not as a "compliance burden" but as a competitive advantage for the future. Companies that integrate sustainability during the design phase and digitize supply chain data will not only be ready for regulations but will also be key players in the economy of tomorrow.

The transformation has already begun; prepare your products for the trade rules of the future without delay.