IDEAS home Printed from https://ideas.repec.org/a/eee/transa/v199y2025ics0965856425002198.html

Optimal subsidy scheme for electric ship adoption in inland shipping

Author

Listed:
  • Cui, Ziyu
  • Fu, Xiaowen
  • Wu, Xiangru
  • Wang, Kun

Abstract

To advance fleet electrification in inland waterway shipping, governments are evaluating various subsidy policies to encourage the adoption of electric ships. This paper presents a game-theoretical model for designing the optimal subsidy scheme that incorporates the interactions among key stakeholders, including the government, port operator, shipping company, and shipper. Three widely adopted subsidy schemes are analytically modeled and benchmarked: subsidies for charging station investment, electric ship purchases, and charging fees. The results indicate that all three subsidy schemes increase the level of investment in charging stations, shipper surplus, port and shipping company profits, and overall social welfare. Meanwhile, the effectiveness of these schemes is significantly influenced by charging efficiency levels. Specifically, under low charging efficiency, operational and purchase subsidy schemes lead to higher social welfare. Conversely, direct subsidies for ship purchases may result in higher investment in charging stations than direct subsidies for charging stations in certain cases. Moreover, higher charging efficiency generally favors charging station subsidy schemes because reduced waiting times improve system efficiency, increase demand, and enhance social welfare.

Suggested Citation

  • Cui, Ziyu & Fu, Xiaowen & Wu, Xiangru & Wang, Kun, 2025. "Optimal subsidy scheme for electric ship adoption in inland shipping," Transportation Research Part A: Policy and Practice, Elsevier, vol. 199(C).
    • Handle: RePEc:eee:transa:v:199:y:2025:i:c:s0965856425002198
    DOI: 10.1016/j.tra.2025.104591
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0965856425002198
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.tra.2025.104591?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    References listed on IDEAS

    as
    1. Li, Zhi-Chun & Wang, Mei-Ru & Fu, Xiaowen, 2021. "Strategic planning of inland river ports under different market structures: Coordinated vs. independent operating regime," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 156(C).
    2. Cai, Zeen & Mo, Dong & Tang, Wei & Chen, Yong & Chen, Xiqun (Michael), 2023. "A two-period game-theoretical model for heterogeneous ride-sourcing platforms with asymmetric competition and mixed fleets," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 178(C).
    3. K Fagerholt & G Laporte & I Norstad, 2010. "Reducing fuel emissions by optimizing speed on shipping routes," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 61(3), pages 523-529, March.
    4. Luo, Qi & Saigal, Romesh & Chen, Zhibin & Yin, Yafeng, 2019. "Accelerating the adoption of automated vehicles by subsidies: A dynamic games approach," Transportation Research Part B: Methodological, Elsevier, vol. 129(C), pages 226-243.
    5. Giagnorio, Mirko & Börjesson, Maria & D'Alfonso, Tiziana, 2024. "Introducing electric buses in urban areas: Effects on welfare, pricing, frequency, and public subsidies," Transportation Research Part A: Policy and Practice, Elsevier, vol. 185(C).
    6. Lee, Jeongwon & Hwang, Junseok & Kim, Hana, 2022. "Different government support effects on emerging and mature ICT sectors," Technological Forecasting and Social Change, Elsevier, vol. 174(C).
    7. Vives, Xavier, 1984. "Duopoly information equilibrium: Cournot and bertrand," Journal of Economic Theory, Elsevier, vol. 34(1), pages 71-94, October.
    8. Zheng, Shiyuan & Jiang, Changmin & Fu, Xiaowen & Ge, Ying-En & Shu, Jia, 2022. "Subsidies for green technology adoption under uncertain demand and incomplete information," Omega, Elsevier, vol. 112(C).
    9. Jung, Seung Hwan & Feng, Tianjun, 2020. "Government subsidies for green technology development under uncertainty," European Journal of Operational Research, Elsevier, vol. 286(2), pages 726-739.
    10. Helveston, John Paul & Liu, Yimin & Feit, Elea McDonnell & Fuchs, Erica & Klampfl, Erica & Michalek, Jeremy J., 2015. "Will subsidies drive electric vehicle adoption? Measuring consumer preferences in the U.S. and China," Transportation Research Part A: Policy and Practice, Elsevier, vol. 73(C), pages 96-112.
    11. Wang, Kun & Fu, Xiaowen & Luo, Meifeng, 2015. "Modeling the impacts of alternative emission trading schemes on international shipping," Transportation Research Part A: Policy and Practice, Elsevier, vol. 77(C), pages 35-49.
    12. Shao, Jing & Jiang, Changmin & Cui, Yinglong & Tang, Yao, 2023. "A game-theoretic model to compare charging infrastructure subsidy and electric vehicle subsidy policies," Transportation Research Part A: Policy and Practice, Elsevier, vol. 176(C).
    13. Peng, Ya-Ting & Wang, Yadong & Li, Zhi-Chun & Sheng, Dian, 2023. "Subsidy policy selection for shore power promotion: Subsidizing facility investment or price of shore power?," Transport Policy, Elsevier, vol. 140(C), pages 128-147.
    14. Zheng, Wei & Li, Bo & Song, Dongping, 2022. "The optimal green strategies for competitive ocean carriers under potential regulation," European Journal of Operational Research, Elsevier, vol. 303(2), pages 840-856.
    15. Mo, Dong & Yu, Jingru & Chen, Xiqun Michael, 2020. "Modeling and managing heterogeneous ride-sourcing platforms with government subsidies on electric vehicles," Transportation Research Part B: Methodological, Elsevier, vol. 139(C), pages 447-472.
    16. Li, Yina & Liang, Chenchen & Ye, Fei & Zhao, Xiande, 2023. "Designing government subsidy schemes to promote the electric vehicle industry: A system dynamics model perspective," Transportation Research Part A: Policy and Practice, Elsevier, vol. 167(C).
    17. Wang, Kun & Zhang, Anming, 2018. "Climate change, natural disasters and adaptation investments: Inter- and intra-port competition and cooperation," Transportation Research Part B: Methodological, Elsevier, vol. 117(PA), pages 158-189.
    18. Song, Zhuzhu & Tang, Wansheng & Zhao, Ruiqing & Zhang, Guoqing, 2022. "Implications of government subsidies on shipping companies’ shore power usage strategies in port," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 165(C).
    19. Perčić, Maja & Frković, Lovro & Pukšec, Tomislav & Ćosić, Boris & Li, Oi Lun & Vladimir, Nikola, 2022. "Life-cycle assessment and life-cycle cost assessment of power batteries for all-electric vessels for short-sea navigation," Energy, Elsevier, vol. 251(C).
    20. Pi, Zhenyang & Wang, Ke & Wei, Yi-Ming & Huang, Zhimin, 2024. "Transitioning from gasoline to electric vehicles: Electrification decision of automakers under purchase and station subsidies," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 188(C).
    21. Korberg, A.D. & Brynolf, S. & Grahn, M. & Skov, I.R., 2021. "Techno-economic assessment of advanced fuels and propulsion systems in future fossil-free ships," Renewable and Sustainable Energy Reviews, Elsevier, vol. 142(C).
    22. Li, Kunpeng & Wang, Lan, 2023. "Optimal electric vehicle subsidy and pricing decisions with consideration of EV anxiety and EV preference in green and non-green consumers," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 170(C).
    23. Liu, Jing & Nie, Jiajia & Zhang, Wenjie & Li, Lingyue & Yuan, Hongping, 2024. "Product development strategies of electric vehicle manufacturers: Considering government subsidy and consumers' environmental preferences," Technological Forecasting and Social Change, Elsevier, vol. 201(C).
    24. Hu, Qiaolin & Gu, Weihua & Wang, Shuaian, 2022. "Optimal subsidy scheme design for promoting intermodal freight transport," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 157(C).
    25. Chen, Rui & Meng, Qiang & Yu, Jiayi Joey, 2023. "Optimal government incentives to improve the new technology adoption: Subsidizing infrastructure investment or usage?," Omega, Elsevier, vol. 114(C).
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Linling Zhang & Shuangqun Li & Xiu Cheng & Jichao Geng, 2025. "Can subsidies promote electric vehicles’ sustainable development? A general equilibrium perspective on substituting enterprises for government," Annals of Operations Research, Springer, vol. 355(1), pages 123-146, December.
    2. Tan, Zhijia & Sheng, Dian & Yin, Yafeng, 2025. "Shore-power capacity allocation in a container shipping network under ships’ strategic behaviors," Transportation Research Part B: Methodological, Elsevier, vol. 192(C).
    3. Liu, Jiaguo & Wu, Jie & Fu, Xiaowen & Kort, Peter M., 2025. "Timing and size decisions of green technology investment for competitive ocean carriers under green regulations," Transportation Research Part B: Methodological, Elsevier, vol. 193(C).
    4. Yin, Chuanzhong & Zhang, Zi-Ang & Fu, Xiaowen & Ge, Ying-En, 2024. "A low-carbon transportation network: Collaborative effects of a rail freight subsidy and carbon trading mechanism," Transportation Research Part A: Policy and Practice, Elsevier, vol. 184(C).
    5. Wang, Junjin & He, Fan & Chen, Mengdi & Liu, Jingling, 2025. "A review of game theory to maritime supply chain: A competitive and cooperative perspective," Transport Policy, Elsevier, vol. 162(C), pages 364-378.
    6. Lu, Bo & Xu, Xin & Qin, Xiaomeng & Cheng, T.C.E., 2024. "Optimal shore power adoption decisions with government regulation considering port competition," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 188(C).
    7. Xu, Lang & Li, Xinyu & Yan, Ran & Chen, Ji-hong, 2025. "How to support shore-to-ship electricity constructions: Tradeoff between government subsidy and port competition," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 201(C).
    8. Lu, Bo & Fan, Lijie & Wang, Jian-Jun & Li, Yonggang, 2025. "Does the EU ETS promote shipping decarbonization? Green investment and sustainability strategies of shipping alliances," Transportation Research Part A: Policy and Practice, Elsevier, vol. 199(C).
    9. Liu, Jing & Li, Lingyue & He, Lingling & Ma, Xiaozhi & Yuan, Hongping, 2024. "Consumers or infrastructure firms? Who should the government subsidize to promote electric vehicle adoption when considering the indirect network and herd effects," Transport Policy, Elsevier, vol. 149(C), pages 163-176.
    10. Sheng, Dian & Wu, Pin & Guo, Qianwen Vivian & Jiang, Jiehui & Liu, Baoli, 2025. "Integrated shore power deployment problem in an inland shipping network," Transport Policy, Elsevier, vol. 169(C), pages 26-40.
    11. Liu, Shan & Yu, Jiayi Joey & Feng, Tianjun, 2025. "The impact of green innovations on firm’s sustainable operations: Process innovation and recycling innovation," Omega, Elsevier, vol. 130(C).
    12. Wang, Zhuowei & Yu, Jiangbo (Gabe) & Chen, Anthony & Fu, Xiaowen, 2024. "Subsidy policies towards zero-emission bus fleets: A systematic technical-economic analysis," Transport Policy, Elsevier, vol. 150(C), pages 1-13.
    13. Raihan, Asif & Hasnat, Md Al & Rahman, Syed Masiur & Ridwan, Mohammad & Rahman, Md Masudur & Islam, Md Tasbirul & Sarker, Tapan & Dhar, Bablu Kumar & Bari, ABM Mainul, 2025. "Recent advancements in alternative energies, technological innovations, and optimization strategies for seaport decarbonization," Innovation and Green Development, Elsevier, vol. 4(3).
    14. Ding, Yanyan & Jian, Sisi, 2024. "Strategic investment in charging infrastructure: Sharing costs or taking over?," Applied Energy, Elsevier, vol. 376(PA).
    15. Li, Yuwan & Yuen, Kum Fai & Zhou, Yusheng, 2024. "Risk assessment of achieving greenhouse gas emission reduction target in the maritime industry," Transport Policy, Elsevier, vol. 155(C), pages 29-46.
    16. Zhao, Meng & Li, Bin & Ren, Jiali & Hao, Zhihua, 2023. "Competition equilibrium of ride-sourcing platforms and optimal government subsidies considering customers’ green preference under peak carbon dioxide emissions," International Journal of Production Economics, Elsevier, vol. 255(C).
    17. Javazi, Leila & Alinaghian, Mahdi & Khosroshahi, Hossein, 2025. "Evaluating government policies promoting electric vehicles, considering battery technology, energy saving, and charging infrastructure development: A game theoretic approach," Applied Energy, Elsevier, vol. 390(C).
    18. Kirkels, A.F. & Liu, H. & Romijn, H.A. & Durgaprasad, S. & Polinder, H. & Goudsmit, M. & Hoorani, N., 2026. "Batteries for sustainable shipping: Current status and potential roles," Renewable and Sustainable Energy Reviews, Elsevier, vol. 226(PB).
    19. Yu, Yi & Zha, Donglan & Zhou, Dequn & Wang, Qunwei, 2025. "Promoting the adoption of electric vehicles through private charging infrastructure: Should subsidies be for the builder or non-builder?," Transportation Research Part A: Policy and Practice, Elsevier, vol. 192(C).
    20. Li, De-Chang & Yang, Hua-Long, 2024. "Voyage charterparty arrangement for river tramp shipping: Green and traditional vessels comparison," Transport Policy, Elsevier, vol. 158(C), pages 75-92.

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:transa:v:199:y:2025:i:c:s0965856425002198. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/547/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.