Blockchain Adoption in the Low-Carbon Supply Chain: A Comparative Analysis of Different Adoption Modes

Abstract

Low-carbon supply chain (LCSC) companies mitigate their carbon footprint through direct emission reduction (DER) efforts, such as using renewable energy, and through emissions trading for indirect offset. Blockchain technology, increasingly adopted in sectors, such as fashion and automotive, supports these methods by addressing key challenges. However, the optimal adoption mode—government, manufacturer, or retailer—remains unclear. In this article, we integrate blockchain's three benefits (reduced DER cost, lower transaction cost in emissions trading, and enhanced green trust) and its three costs (setup cost, operational cost, and usage fee) to compare these modes based on the LCSC's sustainability, profitability, and social welfare. Key findings are as follows. First, blockchain adoption typically boosts sustainability and profitability, although two tradeoffs require careful consideration. Second, retailer adoption outperforms the other modes by significantly enhancing sustainability, maximizing blockchain user profits, and achieving the highest social welfare outcomes. The retailer's profit can also be maximized if the setup cost coefficient and total carbon footprint level are sufficiently low. Another advantage of this mode lies in the flexibility of usage fee. Third, the impact of blockchain adoption varies across supply chains with different carbon footprint levels. These results remain robust in extension with risk considerations. This study provides valuable managerial insights, including guidance for LCSC on selecting the optimal blockchain adoption mode, and recommendations for policymakers to address the lack of economic incentives in low-emission supply chains and reduce the overreliance on indirect offset in high-emission ones.