New Era of Digital Product Passports: An Exclusive with Thomas Knothe

Transcript

• Steve Statler 0:00

  Welcome to the Mr. Beacon podcast. It's a really special episode this week. I'm going to be talking to Thomas Knothe who is the chair of a committee, a group called JTC 24

  who are they? Well, they are a large group of experts that are defining the European Union's standard for digital product passports. And if you've watched any of the episodes over the last decade, you'll know that I'm always enthusiastic about our guests, and frankly, it's if I wasn't enthusiastic about them, I wouldn't be inviting them on. And on the rare occasion when I have had someone on that I felt like was not worthy of your time, then we don't put that episode out. And believe it or not, people do ask to come on the show, and sometimes we say no, it doesn't feel good. But this time, I reached out to Thomas and invited him onto the podcast, and he said yes, which is pretty awesome. It's an exclusive. He's never done a podcast interview before, and it turns out, the nature of standards is such that there aren't any other people that are allowed to talk in the level of detail that Thomas does about the forthcoming standards. And that's not a precious thing. It's not a kind of trying to be exclusive thing. It's simply, when standards are in flux, you there's big stakes commercially. So Thomas is gonna guide us through digital product passports, the standard, what it is when it's coming, who's been working on it, why it's important, how it's gonna work, and when it's when, when we expect the different parts to come online. So I think it's going to be really useful. And you know, when I think about the best episodes of the the Mr. Beacon podcast, they're ones where I'm learning something, and I feel like that something is valuable to other people. And this is definitely one of those episodes this year, February, I left Willie art, which was a really tough decision, where it's an amazing company, there's a ton of episodes on battery free Bluetooth, and all the things that it's doing. But reason I do did it was that I saw this opportunity to build a company that has something to offer in terms of bringing AI and applying it to the regular things like food, medicine, clothing in the physical world and digital product passports are a key part of that this. This whole podcast series started as a follow up to a book I wrote called beacon technologies, the Hitchhiker's Guide to the beaco system, which was a way of capturing everything I thought people would need to know about digital to physical convergence and the use of Bluetooth beacons to make that happen. Well, it turned out there was something missing. And I believe that missing thing is the digital product passport, and it's a great name for something. I was actually explaining this to my 80 year old mother earlier today. And you know, it may sound reductive or simplistic, but you know, all of us the travel have a passport, and the words digital product passport have existed, but really up until now, if you were a product, you could travel around the world without a passport. That is about to change. So just like real passports, products will need a digital product passport. And what do those things do? Well, as the name suggests, as the human passports do, it tells you who you are, and it proves it. It's a certificate of authentication, but it also shows where you've come from, and if you look at the stamps, you can track the path that it took to get there. And it turns out that is super useful if you're trying to make sure that what you've got is a quality product, that it's going to be good for the planet, that it's going to be good for you. So this is an idea whose time has come. It's going to open up massive commercial opportunities because it's a standard that is tied to regulation that mandates its use. So often, when standards get created, they never see the light of day. But this one will, because if you're going to sell batteries or clothing or toys and a bunch of other things to come. By you're going to have to use it. So sounds like a simple concept. Turns out that on one level it is, another level it is not, and that makes it interesting. So you know, the best guess for me are ones where we learn from them that they really know what they're talking about, that they are the definitive source of of knowledge, which Thomas is. He's a university professor, and he's writing, literally writing, the standards, the rules the road, along with several 100 other people who are also experts. But the other thing that I love about our very best guests is hearing them answer the question, what are your what three songs have meaning for you and why? And that it's something we use as a warm up exercise. We do it first, we cut and paste it put at the end. Don't have to listen to it, but it's probably the most fun part of the show. And Thomas's choice is absolutely no exception. And one of the reasons I love that part of the show is it helps me get to know the real person behind the technology. And very often we're using things, and I for one, wonder, what were the people like that started this company that created this technology, and we've got an opportunity with this episode to find out. So enough hype. Here's the conversation. I hope you enjoy it as much as I did. The Mr. Beacon ambient IoT podcast is sponsored by Willi art, bringing intelligence to every single thing. Well, Thomas, thank you so much for coming on to the podcast. You are at the center of what I think is an incredibly important part of technology and business landscape as you You are the chair of JDC 24 this group that's working on digital product passports, but perhaps we could kick this discussion off. And there's a lot of detailed things for us to get into, but can you set the scene and just explain to people what JTC 24 is and and maybe even what a digital product passport is, yeah,

  Thomas Knothe 7:21

  at least digital product passport is digitized information about the product from service several perspectives. One is what is inside the product, how it is made and how it even is behave during the use time. And this is the beauty of digitization, to see the evolvement of parts of the product of the raw material, for instance, how it is made, until this come back into the circular economy. Perspectives means how to deal with reuse, with repair, how to how this event into recycling. And that's really important for our economy, at least, because we cannot leave or live anymore with a linear economy as we have today. And this is very much important, not only for Europe, because the JTC 24 is an artifact coming from Europe. It's as well relevant for all over the world. And of course, the most important products which are related to that is are all the ones where we have a lot of value, where we have the problem in Europe to not have raw material for that, so we have to solve somewhere so. And you can see in the developments in the world, it's very important to become more independent from other sources. So for Europe, it's really extremely relevant to keep raw material into the circle. Yeah, this is rare material. For instance, I'm very much engaged in the development of the battery passport, and so the batteries are not it is not an exception or not a surprise that the batteries are the first who needs mandatory passport from February 2027 Yeah, because this is a very important part of our mobility on the one hand, and on the other hand, we do not have the raw material exactly for the batteries in Europe, yes. And so this isn't the. This passport is an instrument. Is a glue between the production, the use and the R strategies, reuse and recycling and all these things, yeah, because it's very important to know what's happened with that. Can I reuse already used car battery for the energy storage for your solar energy for instance, yes. And so this is at least the missing link. Very much. From the beginning, it was very clear for in Europe to have at least two major components of the digital product passport. The one is the data specifications, because there is a need for having standardized data in order to be comparable and all these things. And on the other hand, it's the system. Means, the technical system how to store, how to access. You can imagine, yeah, they are sensitive information in, for instance, a battery passport, yeah, and this is for sure, important that only persons have access to this information which have, which are granted for that. So and So, we have a lot of technical issues to standardize, because in Europe, there is a decision to have just one DPP system in total, but several different data specifications related to the different product groups. So this is the separation we have in Europe that at least for each product group, for batteries, for construction materials, we have specific specifications, but only one system, so we can allow interoperability. You can imagine, in a car, you have textile and batteries and tires, so but at the end, as it has to be a product passport for the entire car, so all these different product groups have to come together as well. So, and this means we need one system and not several system for each product group. So, and the next good news from Europe, because normally it's very popular to blame and to to blame our Yeah, authorities in Europe, yeah, for over Bucha and all these things, yeah. You know, the European Commission is always blamed. It is very popular to blame them, but I think they made very, very good decisions to have this separation. And the second very good decision is to have a decentralized system. This means the data management of all the passport data are belonging to the, so to speak, economic operators, the economic operators, the one who bring a product into the market, and they decide how to store and how to manage all the data. This is one part of the technical system. And of course, then there is a need for having some standardization, so that you have the opportunity for interoperability. So then the we have, as well another system component. This R is a registry. So this means every product, or let me say, a model or a batch has to be registered in a central storage of the European Commission, but just by having identifiers for that. So this means we have a centralized registry of the products, but this has to be interconnected with the decentralized data storage, where the real data of the product is at least stored and managed. So then we have a third component. This is a backup system which has to be operated by a third party provider. This is needed to have product passports available, even the original economic operator disappears, yeah, so they can keep the data somewhere. Yeah, yes. This three components have to interoperate, you can imagine. And there is a need to access, for instance, for a repair, in order to change data, for instance. And this entire system is quite, quite complex. So this is very new for Europe, and even for standardization, for for performing this kind of standardization, because this is needed so and in Europe we have this kind of regulatory demand, because we have the espr, the

  Steve Statler 14:55

  Eco design. And just spell out a little bit what is espr. Espr.

  Thomas Knothe 14:59

  Is a regulation. This is the Eco design regulation for sustainable products. This is quite new, and this is at least the, I would say, one of the major implementing part for the new Green Deal of European Commission, which is very much attacked by a lot of people, and very much, let me say, delighted by a lot of people. But anyhow, this espr is one of the major regulations. So and the the digital product passport is at least one of the major instruments for the implementation, yeah, but this is the typical thing we are starting normally with regulation. So we, we are hiding behind regulation. This is really, really boring for me, because I'm a researcher. I mean, I'm a scientist, yeah, and I don't like to be to perform research behind a regulation. This is really, this is really not satisfying So, and this is really an issue we have in Europe very much, that on the one hand, we hate regulation and over regulation and bureaucracy, and on the other hand, we are, we are sticking to that. It's really boring for me and but the good news is that this digital product passport is, from my perspective, a business enabler and a very, very strong business enabler. And I'm working in this environment for, let me say, especially the battery in since six, seven years. Yeah. So we started the circular battery processes and all these things. And in the beginning is we were very much sticking to the upcoming regulations. But now, step by step, because I'm involved as well, the implementation of battery passport in large OEM, I see the beauty for the business, the beauty for solving issues we try to solve since decades. And

  Steve Statler 17:08

  what can you give some examples of the problems that you see being solved, specifically for batteries. And then we can talk about other domains, like clothing and the

  Thomas Knothe 17:19

  business problems, you know, especially in large companies, you have always the silo problem between production, marketing and product management, especially in large companies, because the one say, Okay, you have to do this in this way. The other say, or cannot do in this third one is saying, Oh, your unique selling points are the wrong ones. So and they are always blame each other. The good news is, with these product passports, you know what's happened with your product after you sold, so you can purely see what's really happen, so you can so it is at least a missing glue from the information perspective, between production, product management and marketing. So and by the way, it's a it's a very good instrument, for instance, for advertising or the cross selling issues.

  Steve Statler 18:19

  Well, absolutely. I mean, I can imagine a world where you don't buy a car battery, you subscribe to the car battery service. You say, I really like this car battery, and you get your first one, and then, you know, it lives its life for however long. It's eight years. And then, because it's connected, then you can start to see that there are problems, and you can get a replacement. And then the old one goes back, and it gets broken down and gets turned into a new battery by the manufacturer. So the battery suddenly this manufacturer has got is retaining their customer, the customer doesn't need to, you know, worry about this. They're maybe just paying an annual fee for for battery, and they'll have batteries for as long as they need batteries. You know, there's so many. This can completely change retail it can completely change consumer packaged goods, and obviously it can be amazing for the environment, because you move away from disposable products to ones that are built with quality and have a long life.

  Thomas Knothe 19:33

  And this is at least one instrument as a glue between the different process and departments in a company which is missing today very often, yes, yes, that's really nice. So as well, my experiences in implementing battery passport gives you another idea, yeah, because in the battery passport, at least you have all the core data you need for. A company, yes, it's about supply chain data. It's about the link to the production planning control. It is a link then to the sales data. Or, let me say to your the use at least this is the core of of your company, at least so. And yes, this means if you if you are able to manage this in the right way, then you don't need a lot of other software in your Zoo. This means this is a good instrument for putting out a lot of animals in your software Zoo. Yes, and yeah. So this is an improvement potential for for leaner software systems, for instance,

  Steve Statler 20:46

  I one of the things that I think is super interesting about this is privacy and data ownership. So you know, in the past, if I made a car battery, I would probably know who I was selling it to the major distributor, but I might not know who the dealer is. Assuming this is kind of a third it's not going straight into a car. So does that? Does this mean that the OEMs, the manufacturers of the car batteries, will know everything about what's happened downstream, who the different the chain of custody, or will they be, because it sounds like they will have the obligation to host this data that they they they will be kind of the on the hook to host it. Will they be hosting? Will they see everything, or will they be hosting data that they can't even access?

  Thomas Knothe 21:47

  Yes, at least, this is a very, very important question, and this is still under discussion to some extent, how to provide data sovereignty. This is there are so many dependencies so that we do have dependencies on law, yeah, for instance, privacy,

  it's for sure that the company should not know what the customer is really doing currently, and all these things. So that that's really important to to make sure that there is not an, let me say, monitoring of the of the customer, but we need the monitoring of the of the battery. Yeah. So yes, this is, yeah. This is one part we have to solve. We have, we have to solve. And there are these approaches, at least, this is the same with the chain of custody. To some extent, in some business environment, it is not problem that the OEM knows everything about the supplier of my supplier.

  In other environments is the other way around. So and this means we have to foresee in our system specification that both is possible. On the one hand, it's for sure that it's important that you as a supplier can hide specific information of my customer, of my suppliers to my customer, and in other environments, this is the other way around, because this is part of the economy, because if everyone can share the data, then at least the process are much more cheaper. So they should use this opportunity if they trust each other. So and yes, this means we have to allow both options for making business and at least a challenge in our specifications for the standards, because if you have just one configuration, then it's quite easy to set the standards for that. Yeah. But here, as I mentioned, the DPP system, where we are standardizing in the JTC 24 because this is our focus, we have to foresee at least the application for all product groups. This is except food, animal, food and pharmaceutical products. And at the same time, we have to allow different models for supply networks and supply chains. So this is a challenge you have to foresee in a system specification.

  Steve Statler 24:29

  A few questions. So it seems like this ability to trace food is so important and so valuable. Why? Why? Why is food not in the scope? I'm

  Thomas Knothe 24:40

  not quite sure, because I never ask the European Commission, because, yes, I just fulfill the standardization request. But my impression is it's purely because of circularity, because in food and animal food, you have no issue of circularity. That's.

  Steve Statler 25:01

  It so, but you definitely have issues with traceability, don't you, and so, you know, I'm very involved, or I'm quite involved, active in the FDA, FISMA 204, food traceability efforts over here, which are different, but they are kind of maybe a cousin of what you're doing. And,

  Thomas Knothe 25:26

  yeah, this is quite true that, especially for food, traceability is very important, yes, and but for that, there exist other system specifications, yeah, because yeah, for food, it's not so important to know what after, what has happened after the customer bought this So, and this is at least one part why. I guess the food and the food are out of scope for the digital product passport, but for sure, they exist other regulations already, so we cross references. You have Tabak regulation in Europe, which is dealing

  with all the steps in the supply chain, in the value chain of Tabak or tobacco, yes, yeah and yes, the major reason is just to ensure the tax

  Steve Statler 26:27

  in that region. Yeah, exactly, exactly. And we have, I live in California, so cannabis is legal, and as it is in many states, and so they have amazing traceability systems there. So I want to so to me, the benefits are huge. I can imagine it ultimately cutting the cost of goods. And certainly, you know, for anyone that cares about who produced my food or, sorry, my clothing was, is slave labor involved? What's the quality? Is this the real thing? So many benefits. Um, what if my business is, is stealing car batteries and reselling them? Is that is going to be a problem for me as a criminal? Is this going to get in the way of my criminal business?

  Thomas Knothe 27:16

  So the the digital product passport is a very good instrument for at least protecting from stealing, and this is already applied without any regulation, but not for batteries, but for bicycle gears. I'm not quite sure if you are if you have a bicycle in your garage, I don't know. I have

  Steve Statler 27:40

  several. I'm a keen bicycle. I start. I got, I read this book by Mike Berners Lee, the famous climate scientist, and he said, the best thing you can do, or one of the best things you can one of the many things that you can do to cut your carbon footprint, is to get an electric bike. And so I did it, and I'm happier and lighter as a result. So I have two electric bikes. Yeah,

  Thomas Knothe 28:08

  I have no electric bike bike yet, but last year, on the other end, and every year, I perform some bike trips with my brothers, several days, something like that. And last year, we decided to have a trip over the Alps. Means starting in Munich, in southern Germany, is really the opposite of Hamburg, and then go over the Alps to Verona and in Italy. So and my my bike as a normal tracking bike had, in a very normal, seven years acceleration, at least just very this is mine, or something, you know, so. But of course, this internal one is not based on a chain. It's really the internal gearbox inside the second wheel. This was by far not feasible to go over the mountains, so I though I decided to buy a very, let me say, advanced gearbox system with 14 gears internally. And this is a very, very, let me say famous, and, by the way, very expensive one coming from Roloff. The very Is this a hidden champion, typical hidden champion from Germany. And when I bought this and made all the assembly and all these things, I discovered they had a digital product passport, and just for the reason of stealing, because this kind of gearbox needs every year maintenance, and this needs maintenance by professionals. So this means, if you go to the after a year, but. To a professional repair station in order to perform some maintenance, then you have to show that is your your gearbox, at least without that, this is not allowed to do anything so that okay with this, with this digital product passport, it is at least an assurance that this kind of bikes with this box cannot be stolen so easy. So this means this is already an instrument without having the regulation in place. So that's from my perspective. This is one of the one of the 1000 and more benefits of having digital product passports. I