No green logistics without green finance

No green logistics without green finance

Green logistics cannot take root or expand without decisive financial intervention, experts warned at a high-level seminar in Ho Chi Minh City.

Access to capital and targeted financial mechanisms are critical to scaling up clean transport, energy-efficient infrastructure, and emissions-tracking systems, specialists said at the event co-hosted by the Vietnam Economic and Financial Review under the Ministry of Finance and VINEXAD.

Investments in green technology, clean transport vehicles, energy-efficient warehouses, and digital systems for emissions tracking all require substantial financial, technical, and human resources.

Photo: Cushman & Wakefield

In practice, although green transition and sustainable supply chains are seen as inevitable trends, Vietnamese firms are facing numerous barriers, from a lack of capital and technology, to limited expertise and mounting pressure from global value chains. Small and medium-sized enterprises (SMEs), in particular, face even greater challenges in accessing green finance.

"Green logistics is seen as a key for businesses to cope with and recover from global economic shocks," said Tran Thanh Hai, deputy director-general of the Ministry of Industry and Trade’s Agency of Foreign Trade. "To maintain growth and comply with international requirements such as the EU's Carbon Border Adjustment Mechanism, logistics companies must 'go green'."

Hai noted that while logistics contributes significantly to the economy – with a market size of $40–42 billion and annual growth of 14–16 per cent, among the highest in Southeast Asia – costs remain high. Logistics expenses account for 16–18 per cent of GDP, and the sector is a major source of carbon emissions, particularly from road transport.

According to Hai, green certification will be a competitive advantage in the market, and Vietnam has many opportunities to promote green logistics thanks to increasingly modern transport infrastructure and the e-commerce boom.

The retail market in 2024 reached $25 billion, a 20 per cent increase from the previous year, putting Vietnam among the top 10 fastest-growing e-commerce markets globally.

Dao Duy Tam, head of Customs Supervision and Management at the General Department of Customs, noted that since 2020, customs procedures have been digitised to shorten clearance times for businesses. "Based on this foundation, the customs sector is working alongside port operators and logistics firms to optimise cargo handling processes, plan efficient transport routes, reduce travel distances, cut fuel consumption and costs, thereby streamlining supply chains and driving the growth of green logistics," he said.

At seaports and land border gates, authorities are further advancing the application of digital technologies and AI, the Internet of Things, blockchain, surveillance cameras, sensors, scanners, and big data systems to build an integrated information-sharing platform among relevant stakeholders.

Dang Vu Thanh, vice chairman of the Vietnam Logistics Business Association (VLA), observed that many foreign transport companies are adopting environmentally friendly practices, using electric or biofuel-powered trucks instead of petrol or diesel, such as UPS, DHL, and Maersk.

"In a world rapidly going green, green logistics is no longer an option, it is a necessity. With digitised customs, flexible banking, and local government support, a supportive ecosystem will form to help businesses transition effectively," said Thanh.

As for Vietnamese companies, most port operators have switched to 100 per cent electric handling equipment, such as at Gemalink and Nam Dinh Vu ports.

In southern Vietnam in particular, the development of inland waterway transport has helped significantly reduce the number of container trucks on roads, easing congestion and cutting greenhouse gas emissions on routes such as the Mekong Delta and Cai Mep-Thi Vai to Ho Chi Minh City.

At the same time, companies are embracing technologies such as AI, blockchain, and large language models, and accelerating digital transformation to optimise supply chain speed, warehouse space usage, and cargo consolidation, enabling data-driven decisions and building carbon emission tracking systems for better monitoring.

The transition to green logistics remains challenging due to high upfront investment costs and the absence of long-term financial policy frameworks.

Many businesses have emphasised that financial policy is not just an incentive, but rather a necessary condition for advancing green logistics. Measures such as green credit schemes, tax incentives, interest rate support, and funding for technological innovation, if implemented effectively, could help accelerate the adoption of environmentally sustainable models across the sector.

As global climate pressures intensify, green logistics is fast emerging as a strategic pillar in Vietnam’s push for sustainable growth and its path towards Net Zero emissions.

VIR