Title: How can ship operators respond to the carbon tax? Adopting alternative marine fuels as a strategic approach

Authors: Hailing Liu; Keyi Ju; Jue Wang; Zhixuan Xu

Addresses: College of Economics and Management, Jiangsu University of Science and Technology, 666 Changhui Road, Zhenjiang, 212100, China ' College of Economics and Management, Jiangsu University of Science and Technology, 666 Changhui Road, Zhenjiang 212100, China; Energy Soft Science Research Center, Nanjing University of Aeronautics and Astronautics, 29 Jiangjun Road, Nanjing, 211106, China ' School of Finance and Economics, Wuxi Institute of Technology, Wuxi, Jiangsu, 214121, China ' College of Economics and Management, Jiangsu University of Science and Technology, 666 Changhui Road, Zhenjiang, 212100, China

Abstract: Adopting cleaner alternative fuels is critical for addressing the emerging carbon tax policies. This study proposes two carbon taxation mechanisms (fixed and progressive) and evaluates the feasibility of four alternative marine fuels: liquefied natural gas (LNG), methanol, hydrogen, and ammonia incorporates both the net present value (NPV) and the profitability index (PI) to assess the economic viability of alternative fuels. Furthermore, the entropy weight TOPSIS method is applied to conduct a comprehensive assessment. The results indicate that: 1) the progressive carbon tax is particularly effective in reducing economic disparities between large and small ships; 2) hydrogen and ammonia offer significant environmental benefits, LNG provides notable economic benefits, methanol demonstrates superior economic efficiency, and ammonia exhibits the lowest supply risk; 3) the comprehensive evaluation reveals that ammonia is the most viable alternative fuel for ships due to its substantial environmental benefits and lowest supply risk while ensuring relatively higher economic feasibility. This finding helps to the development of more sustainable and economically feasible alternatives for maritime fuel use under carbon taxation frameworks.

Keywords: carbon tax; alternative fuels; net present value; NPV; profitability index; PI.

DOI: 10.1504/IJSTL.2026.155745

International Journal of Shipping and Transport Logistics, 2026 Vol.23 No.1, pp.30 - 54

Received: 27 Jul 2025
Accepted: 16 Nov 2025
Published online: 12 Aug 2026 *

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