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Green Transformation of Logistics Hindered by Lack of Capital, Experts Say

by Giezel Garcia
10/16/2024
in Sustainable Logistics

HCM CITY — Experts gathered at a conference in HCM City this week to discuss the importance of green logistics for sustainable development and the challenges facing businesses in transitioning to greener practices. The event, held on Tuesday, focused on the need for logistics companies to reduce emissions as part of the global push for net-zero emissions by 2050.

Nguyễn Việt Dũng, director of the Centre for Natural Resources and Environment Communication under the Ministry of Natural Resources and Environment, emphasized that green logistics involves sustainable practices in transportation, storage, inventory management, and packaging to reduce environmental impacts. He highlighted the increasing demand from various countries for businesses to report their emissions and adopt greener supply chain practices.

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Trần Văn Toản, country head of Kosher Climate India in Vietnam, noted that with Vietnam’s growing integration into the global economy, local companies must meet international green supply chain standards to remain competitive. He pointed out the recent implementation of the European Union Emissions Trading System, which now covers emissions from ships with a gross tonnage of 5,000 and above. Additionally, the International Maritime Organisation’s 2023 Greenhouse Gas Strategy aims to reduce international shipping emissions by 40% by 2030 compared to 2008 levels.

Lương Quang Huy, head of the greenhouse gas reduction division at the Ministry of Natural Resources and Environment, explained that domestic traffic in Vietnam accounts for nearly 50% of greenhouse gas emissions in logistics. He stressed that transforming transportation to greener alternatives will play a crucial role in achieving green logistics goals. However, the transition faces obstacles, including a lack of viable public transportation options and the significant investment required for businesses to switch to green vehicles.

Vietnam currently has over 40,000 logistics businesses, the highest number in ASEAN, but they are often fragmented and not well-connected, particularly in road transportation. This lack of integration makes it more difficult to implement coordinated green logistics strategies that meet international standards.

Bùi Văn Quỳ, deputy director of Saigon New Port Corporation, shared that the company is making efforts to reduce its environmental impact by transitioning to electric and solar-powered loading, unloading, and transshipment vehicles. While progress is being made in seaports, he emphasized that a comprehensive, industry-wide approach is needed to “green” the entire logistics ecosystem, from production to transportation and end consumers.

The high investment costs for new technologies and the challenge of training workers to operate them are significant barriers to green transformation. Bùi noted that industry leaders must recognize the urgency of adopting green practices as a matter of survival and long-term competitiveness.

Đặng Đình Long, director of logistics companies Mega A Trading Investment JSC, pointed out that Vietnam’s free trade agreements have opened up new export markets and spurred growth in the logistics sector. However, he emphasized that many businesses are struggling with the lack of green capital and skilled workers needed for the transition.

To support green logistics, experts called for the establishment of specific government policies, green financing options, and a set of green criteria tailored to each industry. Such measures would help businesses meet sustainability goals and ensure their continued participation in the global supply chain.

Discover supply chain news insights on The Supply Chain Report. Enhance your international trade knowledge at ADAMftd.com with free tools.

#GreenLogisticsChallenges #CapitalForSustainability #LogisticsTransformation #SustainableSupplyChains #EcoFriendlyLogistics

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