Beyond Compliance: The Regulatory Mandate Rewriting the Rules of Capital Project Delivery

Capital projects in energy, infrastructure, and heavy industry have always been defined by their complexity. But the persistent inefficiency at the heart of these programs; fragmented data, inconsistent documentation, manual verification loops, has long been accepted as an unavoidable cost of doing business.

It doesn't have to be. And soon, it won't be.

A recent proof of value conducted with a major industry leader demonstrated that a Digital Product Passport (DPP)-driven approach can reduce asset procurement effort by over 20%. That is not a marginal improvement on a multi-billion-dollar capital program, it represents a material shift in how resources, time, and capital are deployed. And it is driven not by a new technology platform, but by a new data governance philosophy: that every physical asset in a capital project should carry a verified, traceable digital identity from procurement through decommissioning.

The EU's Ecodesign for Sustainable Products Regulation (ESPR, EU 2024/1781), which entered into force in July 2024, is the regulatory forcing function, with the first mandatory DPP deadlines for iron and steel expected in mid-2028.

But the real value of DPP is not operational efficiency, it is the creation of a new class of capital asset: one that is permanently auditable, permanently queryable, and permanently connected to its own history. That changes not just how projects are delivered, but how they are financed, insured, and valued.

The Real Cost of Fragmentation

The chronic inefficiency of capital project delivery is extensively documented. A McKinsey analysis of more than 300 billion-dollar-plus megaprojects found average cost overruns of approximately 80% and schedule delays of around 18 months. Research by Oxford's Bent Flyvbjerg across a database of 16,000 projects found that only 8.5% met both their cost and schedule targets and a mere 0.5% achieved all promised benefits. A 2025 report by Mace Group found that the world economy could miss out on 1.5 Trillion in economic growth by 2030 due to delayed megaprojects.

The root cause is not technical complexity alone. It is a systemic governance failure: asset data is fragmented across stakeholders, systems, and project phases and no single system can see the whole picture.

The consequences compound across every phase:

• Procurement delays: Driven by inconsistent supplier documentation and repeated verification requests erode schedule integrity and consume disproportionate project management bandwidth.
• Rework: Resulting from design decisions made on incomplete or outdated asset data inflates costs and compresses execution timelines, design inefficiencies are consistently identified as among the seven most significant and recurring drivers of cost overrun.
• ESG exposure: From an inability to quantify carbon footprint, material origin, or waste generation at the asset level. The EU's Corporate Sustainability Reporting Directive (CSRD) already requires large public interest entities to report on environmental risks from the 2024 financial year, with scope expanding progressively through 2028. Non-compliance is no longer a distant risk, it is an active liability.
• Handover failure: Is among the most underestimated cost drivers: industry analysts estimate that poorly managed information handover at project close can consume over 1.5% of total CAPEX expenditure, on a $5 billion program, that is $75 million lost to data reconciliation alone.
• Audit vulnerability: From siloed, inconsistent documentation makes compliance costly and uncertain, particularly as CSRD assurance requirements ratchet from limited to reasonable over time.

The Regulatory Moment: DPP Is Coming, Ready or Not

The ESPR framework introduces DPPs as a mandatory requirement being rolled out in phases for different sectors over the next five years leading up to 2030 (Source: ESPR Working Plan 2025–2030, adopted April 16, 2025; EU DPP Registry goes live in July 2026).

• Batteries: Delegated Act already finalized; DPP obligation expected by February 2027.
• Iron & Steel: Delegated Act expected in April 2026; DPP obligation expected by ~Mid-2028.
• ICT & Electronics: Delegated Act expected during 2026–2027; DPP obligation expected by ~2028–2029.
• Construction Products: Delegated Act to be phased by family; DPP obligation expected by ~2028–2029 (first families).
• Textiles & Apparel: Delegated Act expected in 2027; DPP obligation expected by ~2029.
• Aluminium: Delegated Act expected in 2028; DPP obligation expected by ~2030.

For capital-intensive industries, this is not a distant concern. Iron and steel, foundational inputs to virtually every major capital program, face DPP obligations by mid-2028, with an additional requirement that 25% of steel in public construction and infrastructure be certified 'low-carbon' from January 2029. Steel manufacturers already face simultaneous obligations under CBAM (Carbon Border Adjustment Mechanism, which entered its definitive phase in January 2026), the new Construction Products Regulation (CPR), and packaging rules, making the DPP the fourth concurrent regulatory requirement in a 30-month window.

Organizations that treat DPP as a compliance exercise will absorb the cost of implementation with minimal return. Organizations that treat it as strategic infrastructure will unlock compounding value across the full project lifecycle.

DPP as the Missing Infrastructure Layer

Here is the insight that changes the frame: the Digital Product Passport is not a new system, it is the connective tissue that makes every existing system more intelligent.

Capital projects already generate vast quantities of asset data. The problem is that this data lives in disconnected silos: engineering databases, supplier portals, ERP systems, maintenance platforms. Each stakeholder maintains their own version of the truth. Each project phase requires manual reconciliation. Each audit triggers a fresh scramble for documentation. KPMG's 15th Global Construction Survey (2025/2026), drawing on responses from 375 construction industry leaders across every major region, found that while 68% of executives rank digital systems and processes as critical to their strategic priorities, most firms have accumulated a collection of digital tools without integrating them into a functioning system, meaning data still does not flow usefully from design through procurement through site delivery through handover. As KPMG notes: "adoption and impact are not the same thing."

A DPP creates a verified, persistent digital identity for every asset, a structured record that travels with the physical component from manufacture through operation. Think of it less like a product label and more like a financial ledger for physical assets, a single source of truth that every stakeholder can trust, every system can query, and every auditor can verify.

The operational implications span the full project lifecycle:

• Design: Early access to verified asset specifications reduces late-stage design changes and improves constructability reviews, directly targeting one of the highest drivers of cost overrun.
• Procurement: Standardized supplier data requirements eliminate repeated document requests and accelerate qualification cycles, the primary driver of the 20% effort reduction in our proof of value.
• Construction: Real-time traceability of component provenance and quality status improves schedule confidence and reduces on-site verification burden.
• Handover: Structured data handover eliminates the manual compilation that industry analysts estimate consumes over 1.5% of total CAPEX at project close.
• Operations: DPPs provide the foundation for predictive maintenance, reliability engineering, and digital twin integration, turning capital assets into intelligent, queryable systems.
• Sustainability: Documented material origins, production-route emissions, and recycling pathways directly support CSRD and CBAM reporting obligations, both of which are now in force.

Where the 20% Comes From

The up to 20% effort reduction demonstrated in our proof of value is the measurable result of eliminating specific, identifiable inefficiencies in the asset procurement workflow. In a conventional capital project, procurement teams routinely spend significant proportions of their time on non-value-adding activities: chasing supplier documentation, reconciling conflicting data across systems, manually verifying compliance status, and re-entering information into multiple platforms. McKinsey's 2024 construction productivity research confirms that the construction and capital projects industry has chronically under-delivered on the promise of digital investment, specifically because data strategy and organizational alignment lag behind technology spending.

DPP standardizes the data requirements upstream, at the point of supplier qualification, so that every asset arrives with a verified, structured record. The downstream verification loops are eliminated, not compressed.

For a major capital program managing thousands of equipment items across a global supply chain, this translates directly into reduced procurement headcount requirements, faster schedule execution, and materially lower risk of compliance-driven delays. Given that a one-month delay on a megaproject typically increases total cost by 8–15%, the schedule protection value alone can dwarf the direct efficiency gain.

What Leading Organizations Are Doing Now

The organizations best positioned to capture DPP value are not waiting for regulatory enforcement. They are taking a structured, phased approach:

1. Readiness Assessment: Mapping current asset data flows to identify fragmentation points, manual verification loops, and compliance gaps, establishing a baseline for DPP integration.

2. Pilot Deployment: Selecting a discrete procurement workstream or asset category to validate the DPP workflow, quantify effort reduction, and build internal capability.

3. Supplier Enablement: Engaging the supply chain early to establish standardized data requirements and qualification protocols, the critical enabler of downstream efficiency.

4. Enterprise Integration: Connecting DPP data flows to existing ERP, document management, and operational technology systems to create a unified asset intelligence layer.

Of these, supplier enablement is the most consequential and the most frequently underestimate. Given that implementation typically requires 12–18 months, and that iron and steel DPP obligations are expected by mid-2028, organizations targeting readiness ahead of enforcement need to be actively engaged now.

The Strategic Imperative

The numbers tell an unambiguous story. Megaprojects regularly overrun by 80% on cost and 18 months on schedule. Only 8.5% of large capital programs meet both cost and schedule targets. A single month of delay costs 8–15% of total project value. And regulatory requirements — CSRD, CBAM, ESPR/DPP — are converging simultaneously on the same asset data that capital project teams have historically managed in fragments.

The Digital Product Passport is not a silver bullet. But it is the missing infrastructure layer that capital projects have always needed and regulation is now the forcing function that makes adoption inevitable.

For decades, the inefficiency at the heart of capital project delivery was accepted as unavoidable. That is no longer the case and the leaders who act on that insight now will be the ones who define the next decade of capital project delivery. DPP must be recognized first for what it is: not a regulation, but a structural advantage. The window to lead is open now. It will not stay open indefinitely.

About the Authors

Piyush Chauhan
Principal Consultant, Energy Consulting, Wipro

Piyush has over two decades of experience spanning downstream refining, capital project delivery, and AI-led digital innovation. He brings deep domain expertise in downstream process refining and has delivered capital projects across their full lifecycle, first as a GES+ consultant during the FEL and FEED stages, and later as an LSTK contractor leading detailed design execution, procurement, and shipment activities.

He then transitioned into innovation and product development, shaping the Digital Product Passport (DPP) proposition, aligning it with EU regulations such as the ESPR and IOGP JIP33 MDR, and driving supplier, EPC, and multi-site onboarding onto Wipro’s Falcon DPP platform.

Today, he leads AI-based solution development for DPP and capital projects, architecting agentic AI and multimodal LLM solutions that automate engineering deliverables and workflows. A trusted advisor to C-suite stakeholders, he combines consulting-led thinking, engineering credibility, and cutting-edge AI expertise to deliver boardroom-ready outcomes for some of the world’s most complex industrial programs.

Sidharth Mishra
VP, Managing Partner – Wipro Consulting

Sidharth leads Wipro’s Energy Manufacturing & Resources industry capabilities and consulting business globally. He has 30 years of experience in the energy industry across corporate strategy, downstream planning and operations, shipping & trading operations, and consulting. He advises clients on operational excellence, customer centricity and sectoral decarbonization using digital and data driven capabilities. He regularly speaks in industry forums on decarbonisation approaches, energy transition imperatives, talent transformation, and AI adoption with industry specific SLMs. He has shaped and delivered significant structural cost reduction initiatives in technology and operations across multiple archetypes of businesses and with rapidly evolving operating models.