Global consortium of governments, industry and investors spearheads innovative investment strategy for zero-emission vehicles

 Today, at COP28 in Dubai, United Arab Emirates, the Government of the United Kingdom (as the ZEV Transition Council (ZEVTC) co-chair), the Government of the Netherlands, the World Bank, Amazon, DHL Group, State Street, C40, CALSTART and the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH confirmed their alignment with the Collective for Clean Transport Finance. Together, they will spearhead lighthouse projects that will help accelerate the global deployment of zero-emission buses, medium and heavy-duty freight, and two- and three-wheeler electrification.

The Collective for Clean Transport Finance (The Collective) was formed last year at COP27 to address gaps within transport climate finance by facilitating radical collaboration between governments, businesses and financing institutions. The Collective already connects 80+ organizations with the long-term objective of creating a global deal flow to scale investments in clean transport. It is hosted by the World Business Council for Sustainable Development (WBCSD) and is supported by the UN Climate Change High-Level Champions, the Nand & Jeet Khemka Foundation, Smart Freight Centre, UNEP’s Global Electric Mobility Programme, the World Bank’s Global Facility to Decarbonize Transport and the ZEVTC.

Despite record investments in transport electrification, the proportion of climate finance directed to road transport is insufficient to meet the 1.5°C commitment of the 2015 Paris Agreement – particularly in low- and middle-income countries. Transport decarbonization projects are ramping up to become large-scale, with many low- and middle-income countries investing, for example, in electric buses. However, many sustainable transport and electric mobility projects are still subject to high initial capital investment costs and risks due to slow regulatory environments and inadequate policy frameworks. This often hinders financial institutions’ engagement in the transition at scale. Governments, businesses and financial institutions must join sides to effectively accelerate investments in clean transport.

The Collective was established to address this challenge by activating a global network of governments, financing institutions and companies. Members of the Collective engage in cross-sector dialogues to aggregate individual companies’ demand for zero-emission fleets in alignment with national political ambition for transport decarbonization. As a next step, they will collectively design blended financing strategies, policy frameworks and infrastructure deployment that reflect the optimized risk profile and the scale of the projects.

In a first phase launched today during an event at COP28, stakeholders will align around lighthouse projects like the India e-Bus Grand Challenge, the India e-Freight Accelerator (e-FAST) and the Global Facility to Decarbonize Transport’s Regional Financing Facility for Sub-Saharan Africa – global best practices which provide concrete opportunities for action, while demonstrating innovative financing mechanisms and collaborative approaches. 

Since its foundation, the Collective has been highlighted as a key initiative under the Breakthrough Agenda and is listed as one of the transformative initiatives driving the ZEVTC Global ZEV Transition Roadmap to be launched on 5 December at COP28, to help solve the global investment gap.

“The number of countries that have signed the Global MOU for zero-emission buses and trucks is still growing. To scale up zero-emission transportation, effectively mobilizing public and private sector investment stakeholders is key. The Collective for Clean Transport Finance is uniquely positioned to move the transition forward,” commented Vivianne Heijnen, Minister for the Environment, Netherlands.

“The Collective is providing crucial international leadership to embed cross-sectoral collaboration processes vital for scaling much-needed investment in clean transport. Through the Road Transport Breakthrough and the ZEVTC, the UK is proud to be working alongside the Collective to systematically strengthen international support for developing countries and I look forward to this collaboration going from strength to strength as we jointly implement crucial work under the new Global ZEV Transition Roadmap from 2023,” said Ed Webber, Deputy Director of Financing and Sectors Transition, Government of the United Kingdom.

“The World Bank is already prioritizing efficient, low-carbon urban transport that connects people to opportunities and essential services. The Collective for Clean Transport Finance will further help accelerate efforts to finance and scale the decarbonization of transport,” said Guangzhe Chen, the World Bank’s Vice President for Infrastructure.

“There is ground for optimism in the global race to net-zero – but policymakers and investors must be aligned to deliver needed infrastructure and zero-emission vehicles. In supporting this important initiative and its lighthouse projects in crucial vehicle segments of e-buses and e-trucks, we are taking one further step in the right direction,” said Inger Andersen, Under-Secretary General of the United Nations and Executive Director of the United Nations Environment Programme (UNEP).

“Smart Freight Centre is happy to drive this effort to align and catalyze investments in clean transport together with this group of global leaders. Cross-sector collaboration is crucial to accelerate action, particularly for commercial vehicle segments and for reducing the emission impacts of global freight transportation,” said Christoph Wolff, CEO, Smart Freight Centre.

Jessica T. Donohue, PhD, Head of Global Investment Insights, Sustainability and Impact at State Street, said, “Getting to net zero by 2050 is undoubtedly an arduous task. But through informed decisions, action from all sectors of the economy and the mobilization of capital – combined with the right investments – it is possible to bring about impactful change. Transition finance is something that all stakeholders can get behind. We know we can’t operate in isolation to drive change at scale and strategic collaboration is needed to build upon the efforts already realized by the CCTF.”

“The TUMI E-Bus Mission is offering technical advice and facilitating mutual exchange for cities in the Global South to prepare for the implementation of e-buses resulting in a greener and more livable future. Bringing together decision-makers, business and financing institutions, as the Collective for Clean Transport Finance does, is key to upscale e-bus adoption,” said Elke Hüttner, head of the Division Climate Change, Environment and Infrastructure within GIZ’s global division (GloBe).

“Businesses and governments must cooperate towards de-risking and scaling of green infrastructure projects. That is why we co-founded The Collective for Clean Transport Finance at COP 27 and are proud to see lighthouse projects emerge today that will advance transport climate targets, as well as demonstrate the value of collaborative approaches in finance,” said Uday Khemka, Vice Chairman, The Nand & Jeet Khemka Foundation.