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The purpose of this paper is to understand the process of failure of scale and the corrosion resistance of scale to the substrate in an atmospheric environment.

The corrosion behaviour of X65 pipeline steel with different types of oxide scale was analysed using the natural environment exposure corrosion test, scanning electron microscopy analysis, electrochemical corrosion polarization curve test and other methods in a warehouse environment.

The results of this research show that one type of oxide scale, which is rough, has an uneven microstructure, and exhibits weak adhesion to the matrix, does not protect the substrate from corrosion. Conversely, the uniform, dense oxide scale, which exhibits strong adhesion to the matrix, provides effective protection to the steel. However, as the corrosion develops, the corrosion rate of the substrate tends to accelerate, especially when the structure of the oxide scale is damaged to a certain extent.

The corrosion mechanism of the oxide scale on hot rolled steel in an atmospheric environment has been proposed.

The purpose of this paper is to examine the impact of carbon permit allocation rules (grandfathering mechanism and benchmarking mechanism) on incentive contracts provided by the retailer to encourage the manufacturer to invest more in reducing carbon emissions.

The authors consider a two-echelon supply chain in which the retailer offers three contracts (wholesale price contract, cost-sharing contract and revenue-sharing contract) to the manufacturer. Based on the two carbon permit allocation rules, i.e. grandfathering mechanism and benchmarking mechanism, six scenarios are examined. The optimal price and carbon emission reduction decisions and members’ equilibrium profits under six scenarios are analyzed and compared.

The results suggest that the revenue-sharing contract can more effectively stimulate the manufacturer to reduce carbon emissions compared to the cost-sharing contract. The cost-sharing contract can help to achieve the highest environmental performance, whereas the implementation of revenue-sharing contract can attain the highest social welfare. The benchmarking mechanism is more effective for the government to prompt the manufacturer to produce low-carbon products than the grandfathering mechanism. Although a loose carbon policy can expand the total emissions, it can improve the social welfare.

These results can provide operational insights for the retailer in how to use incentive contract to encourage the manufacturer to curb carbon emissions and offer managerial insights for the government to make policy decisions on carbon permit allocation rules.

This paper contributes to the literature regarding to firm’s carbon emissions reduction decisions under cap-and-trade policy and highlights the importance of carbon permit allocation methods in curbing carbon emissions.