Multi-criteria carbon emission allowance allocation for liner shipping companies in China: An integrated approach based on composite indicators and zero-sum gains DEA

Carbon emission allowance (CEA) allocation mechanisms balancing equity, efficiency, and sustainability principles are central to effective carbon emission trading markets. When national or regional carbon emission trading markets extend to the shipping industry, allocating suitable volumes of CEAs to different shipping companies plays a fundamental role in system effectiveness. The allocation practice of Shanghai Pilot Carbon Emissions Trading based on the single allocation rule of historical carbon intensity has shown limitations in balancing multiple allocation objectives. This study aims to address this limitation by proposing a new CEA allocation mechanism that incorporates multiple indicators and seeks to balance the principles of fairness, efficiency and sustainability. This mechanism consists of a composite-index method for initial CEA allocation and a zero-sum gains data envelopment analysis (ZSG-DEA) model with carbon efficiency optimization to adjust CEA allocation to shipping companies. The case study focusing on liner shipping companies in China suggests that the proposed allocation mechanism can encourage large companies with high-carbon emissions to bear more reduction pressure while supporting companies with superior carbon efficiency to receive proportionally higher allowances. The methodology demonstrates potential for adaptation to other shipping segments and can support governments in incorporating maritime shipping sectors into carbon emission trading systems while facilitating international coordination.