Shore power adoption strategies of shipping companies and pricing decisions of the port under subsidies and carbon taxes: A game theoretical analysis

Shore power technology offers significant potential to reduce shipping emissions, particularly at berth, yet its widespread adoption faces complex economic and strategic challenges. This study develops a game-theoretical framework to investigate how the strategic interactions among shipping companies and the port under the four channel structures, i.e., Single-Leader Multi-Follower-Competitive (SLMF-Com), Single-Leader Multi-Follower-Cooperative (SLMF-Coo), Cooperative Multi-Leader Single-Follower (Coo-MLSF), and Cooperative-Competitive (Co-opetition), affect the decisions on shore power adoption and pricing under the governmental carbon tax and subsidy policies. Theoretical results reveal that the joint implementation of carbon taxes and per-unit subsidies substantially broadens the equilibrium conditions for shore power adoption, proving more effective than either policy separately. Changes in bargaining power structures, such as port dominance or stronger shipping alliances, play a significant role in shaping adoption incentives and distributing revenue and profits. While port-led scenarios maximize port revenue, shipping company alliances can secure higher profits. The game-theoretical analysis also identifies a pervasive “prisoner’s dilemma” where excessive competition, even with low retrofit costs, can suppress overall adoption rates, highlighting the need for coordinated policies. Furthermore, adopting shore power consistently increases cargo volumes, indicating its potential as a market-expanding strategy. The numerical experiments and sensitivity analyses, conducted based on the real-world data from the Shanghai Port, empirically validate these theoretical findings. The numerical results demonstrate that higher carbon taxes and targeted subsidies effectively improve shipping companies’ willingness to adopt shore power and improve green performance for ports, confirm that per-unit subsidies are more effective than one-off capital subsidies for sustained adoption, and highlight how practical barriers, such as connection delays and infrastructure heterogeneity, impede uptake. Theoretical and numerical results demonstrate that stakeholder collaboration and the joint tax-subsidy instrument are crucial for boosting policy efficacy and accelerating maritime decarbonization, with actionable implications for green port development and the low-carbon transformation of the shipping industry.