Navigating Tensions in Circular Industrial Ecosystems: Insights from Digital Product Passport Adoption in Manufacturing

Abstract

As Europe accelerates its shift toward a circular economy, digital product passports (DPPs) are being introduced as a central regulatory mechanism to standardize how product data is shared, governed, and leveraged across value chains. Yet, their implementation presents organizations with tensions arising from conflicting strategic, technological, and regulatory demands, as well as internal resource constraints. Drawing on twelve expert interviews across European manufacturing sectors, this study identifies key barriers and incentives shaping early DPP adoption. From this analysis, we inductively derive four paradoxes that organizations must navigate: organizational-level value vs ecosystem-wide benefit, standardization vs flexibility, transparency vs confidentiality, and regulatory mandate vs innovation. Using a paradox theory lens, we argue that these tensions are not merely obstacles but interdependent contradictions requiring ongoing management. The study contributes to information systems research by theorizing how digital infrastructures for sustainability introduce institutional complexity and offers practical guidance for navigating competing demands through adaptive governance and cross-sector collaboration.