Volume 30: Urban Energy Systems towards Carbon Neutrality

Low carbon transport for petroleum products: A pipeline pricing optimization perspective Renfu Tu, Rui Qiu, Yingqi Jiao, Qi Liao, Ning Xu, Jian Du, Yongtu Liang

Abstract

The pipeline is a low-carbon and economical transportation mode in the downstream supply chain of petroleum products. At present, due to the lack of research on multi-product pipeline pricing strategies, the unreasonable pricing strategy has resulted in low utilization of pipeline capacity. This phenomenon causes the problem of high energy consumption of petroleum products transportation. Therefore, this paper aims to improve pipeline turnover and promote the low-carbon transportation market from the perspective of pipeline pricing optimization. We propose an integrated framework for multi-product pipelines, coupling the pricing strategy and logistics optimization model. This framework is used to simulate the pricing behavior of the pipeline carrier and the corresponding logistics planning behavior of the oil shipper. We simulate and display 10 pipeline pricing schemes for two regions in China with distinctly different logistics structures, and analyze the benefits of the new strategy in both economic and environmental terms. The results show that the well-performing schemes can increase pipeline carriers’ revenue by 11.41 million CNY per month, significantly improve the competitive advantage of long-distance pipelines, and reduce carbon emissions by 272 tons. In turn, recommendations for policymakers are provided at four levels. In conclusion, the new pricing strategy will help reverse the disadvantageous situation of the pipeline in the competitive market and promote the petroleum product logistics industry to reduce carbon emissions.

Keywords Multi-product pipeline, pricing strategy, low carbon, multi-scheme analysis, policy recommendations