Does the product passport also apply to small businesses?

What you must concretely do

What is expected of you

Article 22 of the ESPR (Regulation (EU) 2024/1781) specifically addresses small and medium-sized enterprises. Its purpose is for the European Commission and Member States to take measures to support SMEs in complying with the requirements of the Regulation — such as information, training and targeted support. What Article 22 does not do is provide a general exemption for small or medium-sized enterprises. The obligations under the ESPR itself, and under the delegated acts that establish the precise requirements per product group, apply in principle to every market operator falling within the scope — regardless of company size, unless a delegated act itself contains an exception for smaller parties.

For a company with 10 to 100 employees, this means that the size of the organisation is not in itself a free pass. What does matter is the role the company plays in the chain: which products from the steel sector fall under the ESPR whether the company acts as a manufacturer, importer or processor of semi-finished products determines whether the obligations apply rather than the number of employees on the payroll.

Support is announced, not exemption

The text of Article 22 speaks of measures to support — such as information provision and capacity building — not of a lower standard in terms of passport content. A small construction company that processes semi-finished products can therefore count on information and possibly simplified access to information, but not automatically on less data in the passport or a longer transition period, unless that is expressly laid down in the applicable delegated act.

Your own position in the chain remains decisive

In practical terms, the first question for a small or medium-sized company is not "am I small enough to avoid this", but "what role do I play". A trader who repacks or resells steel without substantial processing has a different position than a processor who transforms semi-finished products into a new product. That distinction carries through in the question of whether the passport must already be present on entry, or whether a separate obligation arises to supply or update data.

Waiting for the delegated act remains necessary

As long as the delegated act for iron and steel has not yet been published, it is not established which concrete requirements will apply and whether it contains a lighter regime for smaller market operators. What is a delegated act and why does it determine what I must do explains why that publication is the moment at which it becomes concrete what a company is expected to do — also for smaller businesses.

Where things go wrong in practice

A few situations regularly arise among smaller companies in the steel chain.

First, the idea that "we are just small" is sufficient reason to let the matter take its course. Article 22 provides for support, not exemption, and the two are often confused in practice.

Second, the timing of action: some companies wait until the obligation officially takes effect before they look into what is being asked of them. In a chain of manufacturer, trader and processor, setting up data flows and administration takes time — time that a small company with limited capacity runs short of sooner than a large enterprise with its own compliance department.

Third, uncertainty about who in the chain must supply which data. A small processing company sometimes assumes that the supplier "will handle the passport", while it is not established who fulfils which role once its own product changes in form or composition.

Fourth, underestimating the question of whether something remains a semi-finished product or becomes an end product. In the processing of steel, that distinction is not always obvious, and it also determines whether and how the passport passes along. Does the product passport apply to semi-finished products of steel goes further into this.

Fifth: confusion between support measures on the one hand — training, subsidies, information provision — and substantive obligations on the other hand. Training on the ESPR does not change what must be included in the passport; these two tracks run independently of each other.

What you can document

Even without the delegated act already in place, it is worthwhile for a small or medium-sized enterprise to have a number of matters in order or to prepare them in advance:

• An overview of the company's own role in the chain: manufacturer, importer, trader or processor of the steel product in question, and whether that role differs per product line.
• An inventory of which products or semi-finished products the company trades or processes, linked to the question which products of the steel sector fall under the ESPR.
• Contact details and agreements with suppliers on who supplies which data once a passport becomes mandatory, so that this is not sorted out only at the first deadline.
• A file with documentation already available on material composition, origin and processing — this may later form the basis for the content of the passport.
• A note of any support schemes or information provision programmes offered by the government or industry association to smaller companies, so that use can be made of them once they become available.
• A subscription to the announcement of the delegated act for iron and steel, so that it becomes clear whether a specific provision for smaller market participants is included therein.