A novel evolutionary game-based low-methane application in three-echelon energy supply chains

Reducing methane emissions across the energy supply chain is critical due to methane’s potent short-term global warming potential, which is significantly higher than that of carbon dioxide. The development and deployment of advanced technologies, the implementation of robust regulatory frameworks, and the fostering of collaboration among governments, industry stakeholders, and consumers are important factors in accelerating the transition to a low-methane energy supply chain. This paper proposes a novel evolutionary game framework to create a green and cost-efficient low-methane application in the three-echelon energy supply chain comprising the government, the energy company, and energy consumers. The proposed low-methane application (LMA) integrates with the high-order evolutionary game dynamics, consisting of the replication dynamics of all stakeholders, methane, and social welfare dynamics of the company and consumers. Stable equilibria are achieved through the acceptance of the LMA, which introduces a novel pricing structure aimed at establishing an affordable methane-free market in the supply chain. A Canadian case study demonstrates the robustness of the LMA, which is further reinforced through its integration into the U.S. energy supply chain, showcasing the framework’s adaptability and strategic relevance in a major global energy market. Our results suggest that the LMA establishes (1) an ecologically benign and cost-effective energy market for all stakeholders involved; (2) a threshold for affordable energy prices; (3) social welfare for both the company and consumers while simultaneously reducing methane emissions within the supply chain; and (4) long-term sustainability for the government by mitigating environmental management costs associated with methane emissions.