Optimal subsidy scheme for electric ship adoption in inland shipping

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.