Shore power vs low sulfur fuel oil: pricing strategies of carriers and port in a transport chain

Abstract With the increasingly serious pollution from ships berthing at port and emergence of low-carbon policies, shore power (SP) low sulfur fuel oil (LSFO) have become effective means to reduce emissions in ports. In order analyse two emission mitigation strategies, we establish a non-cooperative game model transport chain consisting terminal carriers who adopt SP or LSFO strategy obtain equilibrium results pricing strategies under different conditions. We observe that, when carbon price is lower than threshold, both will choose LSFO; otherwise, SP. However, if cooperate maximize their total profits, they simultaneously another threshold higher which profits chain. If less consumer surplus be maximized LSFO, otherwise use this entire chain’s surplus. Finally, validity verified by taking Shenzhen Port as an example.