Economic feasibility of LNG-fuelled river ships: Carbon tax schemes perspective

•A framework for the economic feasibility analysis of green river ships is proposed.•Theory guiding carbon tax formulation for inland waterway transport is contributed.•Novel ideas to promote river LNG-fuelled ships development are explored.•Yangtze River case based on realistic data and multiple scenarios is examined. Inland waterway transportation, with its advantages of large volume and low cost, holds tremendous potential for driving national or regional economic development. Meanwhile, it generates huge emissions through the use of traditional petroleum fuels. To accelerate green shipping growth, employing green energy-powered river ships and implementing policies have become urgent tasks. We construct a novel voyage cost model based on navigation characteristics and investigate the economic feasibility of LNG-fuelled river ships under two proposed carbon tax schemes (fixed vs. progressive). Taking the Yangtze River as an example, we analyze the shipping cost in three transportation systems-bulk cargo, container, and dangerous goods. The results indicate: (1) LNG-fuelled river ships with appropriate deadweight tonnage and deployment on longer routes exhibit favorable economic performance. (2) Progressive carbon tax scheme performs better than fixed one in promoting green shipping. (3) Carbon tax policies should be formulated based on different routes, ship types and sizes.