Tuesday, March 6th, 2012
Carbon pricing and carbon offsetting: What is the difference?
At Virgin Australia, we are committed to being a leader in sustainability in the aviation industry.
One example of how we have led the way for the industry is our carbon offset program, Fly Carbon Neutral. Launched in 2007, it was the world’s first government-certified airline carbon offset program.
As we know, the Australia Government will introduce a carbon price in Australia in July 2012 and last week we provided details of how it will affect our airfares. However, some have rightly asked:
‘Why should I offset my flight if I’ve already paid for the carbon price as part of my fare?’
The answer is – they are different means to different ends.
Funds raised from the Australian Government’s carbon price will go towards assisting households and small businesses transition into a clean energy future. It won’t be until 2015, when the carbon price changes to a fully flexible cap and trade scheme, that some of the funds raised begin to be used for investment in activities that offset carbon emissions.
Therefore, for the next three years at least, the carbon price is designed to provide additional incentive for companies and households to reduce emissions. It does not offset your flight and you will not be flying carbon neutral.
Conversely, our carbon offset program provides an immediate way to address carbon emissions.
Every time a Guest takes up the voluntary option to offset their flight, the money goes directly towards purchasing carbon credits that “offset” the emissions attributed to their flight.
We only purchase credits that are approved under the Australian Government’s National Carbon Offset Scheme to ensure that they are of the highest quality.
For example, one of the projects supplying credits to our program involves a new water treatment facility in Thailand which captures methane gas (a powerful greenhouse gas). Previously waste water was treated in an open pond system and the methane was released into the atmosphere.
The project has also resulted in a number of other environmental and social co-benefits, including:
* The re-use and recycling of water within the production process
* Improving local air quality
* Producing clear and fresh water in the lagoons, free from pollution
* Waste water being used for irrigation of local farms, providing better yields
* Funds donated from the project being used to support a local school with computer equipment and library facilities.
It is also important to note that the carbon emissions offset by our Guests are not used by us to reduce our liability under the carbon price.
At Virgin Australia, we are committed to minimising the carbon emissions from our operations. Some of the ways we are achieving this:
* We maintain a very young fleet of fuel efficient aircraft, the average age being 4.9 years. We have invested in a $2.5billion fleet renewal program over the next six years to ensure our fleet remains modern and fuel efficient. An example of this is the introduction of ATR turboprop aircraft to our fleet, which are up to 40% more fuel and greenhouse efficient than existing aircraft on our short to medium haul routes.
* We have a dedicated fuel efficiency team that is examining ways to further reduce emissions through improving operations, adopting new technologies and working with airports and air navigation service providers to improve air traffic management.
* We actively support the development of sustainable, aviation biofuel and are working towards sourcing 5% of our fuel requirements from these fuels from 2020. Last year, we announced our support of two highly promising Australian projects that use sustainable means and methods, such as the eucalypt mallee tree, to achieve high-quality bio-crude oil.
So there is a significant difference between the Australian carbon price and our carbon offset program. We know there won’t be one quick solution to achieving sustainable air travel, so we are working with a range of stakeholders and we look forward to engaging with the sustainability initiatives that result from the carbon price.
For more information about our sustainability strategy and our carbon offset program, please our website here.