Title: Evaluation of emission trading scheme effectiveness in freight transportation

Authors: Yue Feng; Mingyuan Yue; Lei Dai; Hao Hu

Addresses: State Key Laboratory of Ocean Engineering, Shanghai Jiao Tong University, Shanghai 200240, China; School of Naval Architecture, Ocean and Civil Engineering, Shanghai Jiao Tong University, Shanghai 200240, China ' State Key Laboratory of Ocean Engineering, Shanghai Jiao Tong University, Shanghai 200240, China; School of Naval Architecture, Ocean and Civil Engineering, Shanghai Jiao Tong University, Shanghai 200240, China ' State Key Laboratory of Ocean Engineering, Shanghai Jiao Tong University, Shanghai 200240, China; School of Naval Architecture, Ocean and Civil Engineering, Shanghai Jiao Tong University, Shanghai 200240, China ' State Key Laboratory of Ocean Engineering, Shanghai Jiao Tong University, Shanghai 200240, China; School of Naval Architecture, Ocean and Civil Engineering, Shanghai Jiao Tong University, Shanghai 200240, China

Abstract: Decarbonisation for the freight transportation sector has long been a difficult global problem. ETS is seen as an effective market-based measure to achieve CO₂ emission reduction in many industries in the short term. However, no comprehensive transportation ETS has been designed and the potential effectiveness in the freight sector has not been verified. A freight energy-emission-economic impact model (FE3IM) is proposed to investigate the feasibility of freight transportation ETS. The energy, emission, and economic impacts of transportation ETS are quantified in this paper. In order to achieve the most effective ETS design, some important elements are adjusted to observe their impact on emission reduction. An empirical study of China's freight sector shows that ETS has a significant impact on emission reduction. In addition, ETS can also help adjust the transport structure and promote electrification. However, the current ETS design makes it difficult to achieve emission abatement goals. More radical measures are needed to achieve the emission peak. Improving carbon pricing, reducing free allowances, or increasing subsidies for new energy vehicles will play a positive role in achieving the CO₂ emission abatement objective.

Keywords: freight transportation; CO₂ emission; emission trading scheme; ETS; energy; decarbonisation cost.

DOI: 10.1504/IJSTL.2025.147555

International Journal of Shipping and Transport Logistics, 2025 Vol.20 No.4, pp.465 - 495

Received: 03 Jul 2023
Accepted: 05 Mar 2024
Published online: 21 Jul 2025 *

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