International airfares set to rise as carbon offsets become mandatory in 2027

International travel could soon see Aussies forking out more for airfares thanks to a policy change over greenhouse gas emission offsets. See why and how much you could end up paying.

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International air travel is set to become more expensive because optional carbon offsets will become mandatory in 2027, experts believe, despite ongoing concerns about the effectiveness of the schemes they pay for.

A UN resolution that Australia agreed to in 2016 called the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) moves from being a voluntary scheme to a mandatory one in 2027, meaning airlines flying international routes will have to pay to offset the greenhouse gases they generate.

Lufthansa has already announced an “environmental surcharge” of up to 72 euros (A$119.53) for all flights booked from January 1 next year, to help pay for its carbon offsets, and there are concerns other airlines will follow suit.

While carbon offsets are strictly voluntary on Qantas and Virgin Australia flights right now, few passengers are actually taking the option: just 1-3 per cent on Virgin and 6 per cent on Qantas.

There are concerns other airlines might follow in Lufthansa’s footsteps with “environmental surcharge” applied to flights. Picture: AFP

The cost of the offset depends on a range of factors, including how far you’re going.

To fly Sydney to London return economy in November, you’ll pay $53.37 for the carbon offset with Qantas, and to offset a Melbourne to Tokyo return economy flight with Virgin Australia you’ll be charged $2.66.

When asked whether the cost of mandatory offsets will be passed on to customers from 2027, both airlines said they were monitoring developments in the market and regulatory framework.

“It seems plausible that more airlines will impose surcharges in future to cover these additional costs, whereby paying for carbon offsets does effectively become mandatory for passengers,” said Dr Megan Evans, a senior lecturer in public service management at UNSW.

Airlines use the voluntary contributions from passengers to purchase carbon credits that support a range of emissions-reduction projects, but there are significant concerns over whether some of these schemes really achieve what their proponents say they do.

A University of California Berkeley study published earlier this year found that cookstove carbon credit projects (where old combustion stoves in the developing world are replaced with more efficient alternatives) were over-estimating the emissions savings by a factor of 10.

But the cookstove projects have proved popular – particularly with international airlines – because the carbon credits they generate are cheap.

Dr Evans said if airlines used cheap carbon credits from “low-integrity” projects, the cost of tickets would go up only slightly.

“Use of more expensive credits from high integrity projects would cost much more, meaning a much higher price for customers, who would likely change behaviour and fly less often,” she said.

Travel writer Jenny Hewett said she accepted that mandatory carbon offset surcharges were probably coming to international aviation, but she wanted to see greater transparency in the system. Picture: Supplied

In its sustainability report, released last week, Qantas said: “We recognise that carbon projects and the use of carbon offsets are under increasing scrutiny” but also forecast that its investments in carbon markets would grow, partly because of CORSIA.

Aussie travel writer Jenny Hewett said she accepted that mandatory carbon offset surcharges were probably coming to international aviation, but she wanted to see greater transparency in the system, so she knew the additional fees were doing some good.

“The last time I took a big personal trip and paid for my flights, I offset my carbon footprint on a third party carbon offset website, but found it extremely confusing. It’s still very much an unregulated industry,” she said.

Lufthansa’s new environmental surcharge probably wouldn’t stop her from flying with them, Ms Hewett said.

“I don’t think it’s such a bad idea. It forces both travellers and the airlines to be accountable and it takes the hassle out navigating confusing and unregulated carbon offset schemes,” she said.