Indian logistics moving towards a sustainable future

India's largest private sector company Reliance signs an agreement with DP World to shift product transport from road to rail; world's second largest ocean carrier Maersk highlights its efforts for sustainable transport by naming a dual-fuel methanol vessel - Albert Maersk - in Mumbai; and GreenLine Mobility Solutions raises $275 million equity investment for expansion and LNG refuelling stations.

These are some key highlights in India's tectonic shift in transport logistics where sustainability has become the prime focus area, notwithstanding challenges like infrastructure, funding, demand and regulations.

"It is a privilege for India to host the naming of this advanced dual-fuel vessel, a historic first for a foreign shipping company in our country. With the demand for green vessels rising, India has the potential to become a major producer and supplier of green methanol, ammonia and hydrogen-based fuels," Sarbananda Sonowal, Minister of Ports, Shipping and Waterways, said while speaking at the Maersk naming ceremony in Mumbai on February 28, 2025.

Bio- and e-methanol can reduce greenhouse (GHG) emissions by at least 65 percent compared to conventional fossil fuels such as bunker oil (depending on the feedstock and production process of the methanol, calculated on a life cycle basis).

“At GreenLine, we firmly believe the future of logistics lies in clean, sustainable transport solutions,” says Anand Mimani, CEO, GreenLine Mobility Solutions.“Our investment of $275 million reflects both our conviction and the rapidly growing market opportunity in this space. Our mission is to decarbonise India’s transportation sector, which contributes nearly 15 percent of the country’s total carbon emissions. With over four million trucks currently in operation — and the number continuing to grow — India’s road logistics sector remains one of its most carbon-intensive industries.”

Capt. Prashant Widge, Head of ESG and Public Affairs, South Asia, Maersk adds that infrastructure presents both challenges and opportunities for decarbonising shipping and logistics.

“And we're taking a multi-faceted approach:

*First, ocean-going ships are the largest contributors to greenhouse gas emissions in the shipping and logistics sector. Therefore, in line with our target to achieve Net Zero emissions by 2040, we are now ordering only dual-fuel vessels that can operate on low-emission fuels. Several of these vessels have already been added to our fleet, and some of them are already calling Indian ports in regular service.

*Second, on the shoreside, we are ensuring that our facilities such as warehouses, ports and terminals are gradually moving to renewable energy. We are installing solar power plants on the rooftops of our own warehouse facilities. At ports and terminals, we are collaborating with port authorities to draw electricity from renewable sources. At all facilities, we are rapidly transitioning towards electric material handling equipment.

“At Maersk, we believe the future of trucking lies with direct electrification. Thus, we have deployed electric vans where possible for our landside transportation. We have been working intensively towards moving more cargo on rail, which is a lower-emission mode of transport, and offering our customers more options to help them reduce their emissions footprint too.

“The infrastructure challenges that still need resolution include the availability of low-emission fuels and their bunkering at Indian ports, adequate charging infrastructure for electric vehicles deployed in the distribution network, and the transition toward its rail network operating fully on renewable electricity by the end of the decade.”

We have been working intensively towards moving more cargo on rail, which is a lower-emission mode of transport, and offering our customers more options to help them reduce their emissions.
-Capt. Prashant Widge, Maersk

DP World is implementing digital solutions across the value chain to enhance logistics and transport efficiency, contributing to more sustainable supply chain operations. Adhendru Jain, Vice President - Rail and Inland Terminals, DP World Subcontinent, says: "We aim to achieve significant reductions by 2030, using 2022 as our base year, and remain dedicated to reaching Net Zero across all emissions sources by 2050.

"We are committed to investing in advanced technology, fostering responsible business practices and driving collaboration across our value chain. We have developed a robust multimodal network comprising ports, rail terminals, inland container depots, cold storages and free trade warehousing zones to strengthen first- and last-mile connectivity. Our rail-led services such as the sustainable, assured, reliable and agile logistics (SARAL) initiative are shifting cargo from road to rail, cutting emissions by up to 70 percent.

"The SARAL network connects key trade corridors including Hazira to NCR (SARAL-1), Chennai to NCR (SARAL-2), and Gandhidham to NCR (SARAL-3), enabling faster, greener cargo movement across India. Our facilities, including key terminals like Pali in Haryana and Sachana in Ahmedabad, operate with renewable energy and integrate smart technologies to optimise resource efficiency.

"By investing in green energy, electrified equipment and carbon footprint calculator, we are creating a logistics ecosystem that supports India's net-zero ambitions while driving operational excellence and market access for businesses.

DP World is also accelerating the adoption of solar and wind energy across ports and terminals in India, with 11 MW of green energy already powering Nhava Sheva terminals.

Jain says: "Additionally, we have installed solar panel systems of 1.5 MW at Nhava Sheva Business Park and one MW at DP World’s Economic Zone in Chennai, contributing to emission reductions. Across our operations, 7,200 KW of solar capacity is already in place, with another 2,200 KW in progress. Our upcoming greenfield terminal at Tuna-Tekra in Gujarat is designed for 100 percent compliance with the government’s Green Ports (Harit Sagar) guidelines, ensuring resilience and sustainability.

"We are also exploring low-carbon fuel supply, integrating green energy to reduce our carbon footprint in line with the government’s Maritime India Vision 2030. Our green power sourcing at Nhava Sheva terminals is replacing conventional energy with sustainable alternatives, cutting CO₂ emissions by 50 percent. Additionally, 100 percent electric material-handling vehicles operate at both locations, promoting clean energy and minimizing greenhouse gas emissions."

Promoting green finance through mechanisms like blue or green bonds can mobilise significant capital toward sustainable infrastructure.
-Adhendru Jain, DP World

Ketan Kulkarni, Managing Director, Gati Express and Supply Chain adds: "At Allcargo Gati, sustainability is integral to how we operate, innovate and build partnerships. Our shift to alternative fuel vehicles for first and last-mile deliveries reflects a strategic move toward reducing emissions while optimising long-term operational efficiency. Through targeted innovation and collaborations, we are making tangible progress toward our carbon neutrality goals aligned with transformative national infrastructure initiatives like PM Gati Shakti."

Sustainable transport and cost challenges
Cost has always been a consideration for sustainable transport, and different players are looking at the issue in different ways. "At the moment, since the supply of low-emission shipping and logistics solutions is lower than the demand, the cost of such solutions will remain high,” says Widge of Maersk. “However, we look at this cost consideration in two areas – one is the capital expenditure that we, as a shipping line, need to make in acquiring assets such as dual-fuel vessels, and the other is the operating cost of such vessels with more expensive low-emission fuel.

"With our decision to introduce dual-fuel vessels, we want to demonstrate to customers that we mean business. At the same time, we need the ecosystem across the entire value chain to invest in this, all the way to the customers, whose commitment is very important. Based on our initial dialogues, we expect customers to be prepared to join us in this venture. While the fuel price is likely to increase, the impact on retail prices in stores will remain minimal.

"For example, on the ocean trade lanes of a normalised market, a 100 percent increase in fuel cost would increase our shipping rate by approximately 20 percent - but would only affect retail prices by around six US cents for a pair of sneakers and one US cent for a banana. This is a small consideration for a significant impact on the environment that we hope our customers, and ultimately the end users, will share with us."

Special products for sustainable delivery
DP World and Reliance Industries have teamed up to launch an innovative logistics solution for the petrochemicals industry, shifting product transport from road to rail, significantly cutting carbon emissions while enhancing operational efficiency. Jain says: “Our partnership with Reliance Industries represents a significant step forward in advancing sustainable logistics solutions in India. By re-routing substantial volumes of petrochemical cargo from road to rail, we are significantly reducing carbon emissions by up to 70 percent per container, while driving greater operational efficiency and strengthening supply chain resilience. This rail solution utilises DP World’s multimodal infrastructure to enhance cargo movement between Jamnagar, Ahmedabad and Mundra, reducing environmental impact while aligning with Reliance’s sustainability objectives. Through this partnership, we are advancing practical and technology-driven approaches to develop more sustainable and efficient trade corridors that support India’s net-zero goals and reflect evolving industry standards.”

"Here is another example: a leading global tyre manufacturer was seeking to cut emissions from moving over 200 trucks daily from southern India to multiple regional distribution centres (RDCs) in the north. We switched the traditional trucks to containers that would load more cargo, reducing the number of overall trips. By consolidating cargo into high-capacity containers and adopting a multimodal transport solution, combining coastal shipping and rail with limited road use for first and last mile, we reduced CO₂ emissions across their supply chain by 53 percent and simplified supplier management."

Modal shift strategies such as moving cargo from road to rail reduce fuel consumption and emissions while enhancing reliability and scalability for businesses, adds Jain of DP World. "We enhance operational efficiency and sustainability by deploying electronic reach stackers (ERST) for container handling, reducing emissions while streamlining logistics operations. Our double-stack train service efficiently transports 180 TEUs per trip, significantly cutting cargo emissions and reducing the number of trips needed, enhancing both sustainability and operational efficiency.

"In addition to this, we support the steel industry's transition to greener supply chains by using our containers and specially designed bogie flat steel wagon (BFNS) rakes for moving steel across India. By shifting freight movement away from roads, we help major steel manufacturers reduce emissions, enhance efficiency, and lower their carbon footprint, driving cost efficient logistics."

Maersk is offering customers the option of an ECO Delivery solution that allows for the use of low-emission fuel for their supply chains. "Our customers also get audited certificates indicating the emissions they managed to lower from their supply chains," says Widge. "The adoption of ECO Delivery hugely depends on our customers' maturity in their sustainability journeys. Some of the more mature customers are opting for increased volumes to be moved on ECO Delivery, while others are still in the discovery phase of understanding its benefits.

"India is a brutally cost-sensitive market, making it slightly more challenging to encourage customers to choose ECO Delivery solutions. While we have observed a significant increase in ECO Delivery volumes during the initial years following its launch from 2020 to 2022, various external factors that have inflated shipping costs have hindered the adoption of this more expensive solution.

"Maersk ECO Delivery Ocean customers now also have the option to choose between 100 percent, 50 percent, 25 percent and 10 percent blends of reduced-emission fuels and fossil fuels. This offers lower emission savings per container transported under ECO Delivery ocean and lower rates per container, which is particularly attractive for companies at the beginning of their decarbonisation journeys."

The logistics sector - still heavily reliant on diesel-powered vehicles - often faces resistance due to the high capital costs of alternative-fuel trucks, limited refuelling infrastructure and general hesitation around technological transitions.
-Anand Mimani, GreenLine Mobility Solutions

One of the biggest challenges in operating sustainable transport is transforming legacy systems while ensuring commercial viability, according to Mimani of GreenLine. “The logistics sector - still heavily reliant on diesel-powered vehicles - often faces resistance due to the high capital costs of alternative-fuel trucks, limited refuelling infrastructure and general hesitation around technological transitions.

"At GreenLine, we view these not as deterrents, but as opportunities to drive systemic change. Our approach began with infrastructure. Through our subsidiary, UltraGas & Energy, we are building a nationwide LNG refuelling network to ensure dependable access to cleaner fuel across key transport corridors. In parallel, we are rapidly expanding our fleet of LNG-powered and electric trucks. These vehicles reduce CO₂ emissions by up to 30 percent and N₂O emissions by up to 59 percent, while offering operating costs on par with diesel trucks—making sustainable transport a commercially viable alternative.”

Also Read:GreenLine aims to reduce carbon emissions by 1mn tonnes in three years

Key learnings from EV operations in India
Like ECO Delivery, the adoption of electric vehicles (EVs) in the distribution network hugely depends on our customers' maturity in their sustainability journeys, adds Widge. "The middle-mile and last-mile distribution networks are primarily dominated by e-commerce customers who work in a cut-throat, cost-competitive environment. For them to shoulder even the slightest rise in rates is nearly impossible, leading us to work with a much smaller customer base.

"Secondly, charging infrastructure has never been more critical in this sector. Since EVs in logistics have to run for long durations, efficient charging infrastructure is all the more essential. The governments need to make the necessary investments in grid infrastructure and simplify permitting regulations to pave the way for the required expansion of the charging infrastructure.

"Thirdly, upskilling manpower in the sector to deliver on the transition to electrification is extremely important.

"Finally, EVs in the large commercial vehicle segment face an immense challenge regarding the capital investment required. Until the vehicle's cost is competitive with traditional vehicles and its efficiency of operations is at a similar level as conventional engine vehicles, it won't be easy to scale up the distribution network powered by EVs."

Regulatory challenges and way ahead
To truly accelerate sustainable operations in the logistics and port sector, regulatory authorities need to create an enabling policy environment that rewards long-term environmental responsibility, says Jain of DP World. "This includes offering incentives such as tax benefits or low-cost financing for investments in renewable energy, electrification of port equipment and low-emission transport solutions. Simplifying access to renewable energy through open access frameworks and streamlined approvals is critical, especially in a sector that operates on large-scale, continuous power needs.

"Authorities can also play a crucial role by standardising carbon emissions reporting across the industry, aligning it with globally recognised frameworks such as the Science Based Targets initiative (SBTi), which helps ensure accountability and transparency. Finally, promoting green finance through mechanisms like blue or green bonds can mobilise significant capital toward sustainable infrastructure.

"With the right policy support, the industry can transition much faster toward carbon neutrality and become a key contributor to national and global climate goals."

To close the price gap between green and fossil fuels on a well-to-wake basis and ensure the uptake of green fuels, Maersk believes three critical elements must be incorporated into the regulatory framework:

*Accuracy in emission values: Emission values must accurately reflect real-world well-to-wake emissions. The regulation should apply penalties or rewards in proportion to each fuel's emissions, ensuring that the carbon intensity of fuels is accurately reflected in regulatory costs.

*Sufficiently high emission reduction trajectory: To encourage the adoption of green fuels with the necessary pace to meet IMO 2023 GHG targets, the regulation must ensure sufficiently high reduction targets on its way to net zero in 2050; and

*Strong financial measures: The combined levy and remedial unit price must at least equal the marginal abatement cost of green fuels and technologies, ensuring that compliance with the regulations is more cost-effective than paying for non-compliance.

Widge says: "Last month, the International Maritime Organisation (IMO) member states reached an agreement on the text for the first global greenhouse gas pricing framework of any sector. The agreement needs to be formally adopted in October to enter into force.

"The agreement text sets the penalty price at $380 and the GHG price at $100 for ships in the lower compliance band. While this falls short of the $600 level Maersk had advocated for, it is a stronger outcome than the initial positions. At Maersk, we applaud the IMO Secretariat's fantastic effort and skill and the many delegations' very constructive approach. Hopefully, this example of constructive global action can inspire other hard-to-abate sectors.”

Our shift to alternative fuel vehicles for first and last-mile deliveries reflects a strategic move toward reducing emissions while optimising long-term operational efficiency.
-Ketan Kulkarni, Managing Director - Gati Express and Supply Chain

While cost considerations have traditionally challenged green logistics, Kulkarni of Gati feels on-ground experience shows that sustainable transport solutions can deliver measurable value. “With progressive policies such as the Maharashtra EV Policy providing strong institutional support, the path is clearer than ever for the logistics sector to scale sustainable mobility and develop a future-ready, environmentally responsible supply chain."