Green Logistics Innovation for Emerging Markets Driving Competitiveness and Shared Value 2025

The public sector plays a pivotal role in bridging financing gaps for logistics decarbonization in emerging markets by strategically absorbing risks that deter private capital – particularly in research and development (R&D), early-stage tech, scaling solutions, and SME participation. Doing so requires deploying blended financial instruments that both de- risk investment and mobilize green capital at scale by turning uncertainty into investable opportunities. Support R&D and early-stage technologies through innovative funding Early-stage innovations such as hydrogen- powered freight solutions and AI-enabled logistics optimization often lack a proven track record of commercial performance, making them difficult to finance through traditional channels. To bridge this “valley of death”, public-sector actors can play a catalytic role by offering development-stage support, including grants and state-backed venture funding. Additionally, governments can deploy concessional instruments such as risk guarantees and technical assistance to de-risk private capital while also enabling the use of innovative financing tools tailored to nascent technologies. Scale proven solutions and empower SMEs through blended finance Scaling green logistics solutions in emerging markets requires long-term capital commitments, especially in environments dominated by fragmented and undercapitalized SMEs. This is due to the fact that these actors frequently lack access to affordable financing for sustainable upgrades. Governments can play a catalytic role by directing capital to SMEs through concessional instruments and encouraging financial institutions to develop sector-specific blended finance mechanisms.3.2 Mobilize green and transition finance Source: National Energy Administration. (2024). Notice of the National Energy Administration on Issuing the 2024 Project Application Guidelines for Four Key Special Topics under the National Key R&D Program, Including “Clean and Efficient Coal Utilization Technologies”.China’s National Key R&D Program drives technology innovation through funding support BOX 3 China’s National Key R&D Program allocated CNY 254 million (around $35 million) for hydrogen development in 2024, and policy-oriented industrial funds are also supporting hydrogen fuel value chain development from critical materials and core equipment to original technology breakthroughs. Source: Kohli, S. (2024). Electric vehicle demand incentives in India: The FAME II scheme and considerations for a potential next phase. International Council on Clean Transportation (ICCT); García Coyne, R. (2023). Expanding Access to Financing for Zero- Emission Trucks in Latin America and The Caribbean. Global Commercial Vehicle Drive to Zero.Financial incentives in India and Mexico for scaling green fleets and empowering SMEs BOX 4 India’s FAME II programme (2019–2024) catalysed a nationwide EV ecosystem and corridor charging network by allocating INR 115 billion (Indian rupees) (around $1.4 billion) to subsidize over 1.7 million electric light vehicles (89% two- wheelers, 9% three-wheelers, 2% four-wheelers), 7,200 e-buses and the installation of 2,700 charging stations.Mexico’s development bank, NAFIN, has rolled out a green-fleet programme that offers scrappage incentives and long-term loans to support SMEs in upgrading to cleaner vehicles, including compressed natural gas (CNG), hybrid and electric trucks. Scaling green logistics solutions in emerging markets requires long-term capital commitments, especially in environments dominated by fragmented and undercapitalized SMEs. Close infrastructure financing gaps through public-private partnerships: Enabling green freight transport through the rollout of national charging and refuelling networks is central to the development of the green logistics sector. In parallel, urban and port authorities are establishing specialized logistics zones equipped with energy-efficient warehouses, cold-chain facilities, multimodal terminals and renewable- powered microgrids. Public-private partnerships (PPPs) can close the financing gap for green logistics infrastructure by pairing public policy and de-risking tools with private capital and execution. For example, the World Economic Forum’s recent Financing the Airports of Tomorrow report highlighted how New York’s LaGuardia Airport became the world’s first to achieve LEED Gold v4 certification through a public-private partnership model. Governments can provide site access, clear permitting and standardized contracts, and also use viability gap funding, credit guarantees and/or availability payments to improve bankability for projects such as shore power at ports, electric yard equipment, truck charging depots and hydrogen/methanol bunkering. Private partners also bring capital, delivery capability, asset management and digital systems that raise use and revenue certainty. Green Logistics Innovation for Emerging Markets: Driving Competitiveness and Shared Value 24