The Environmental Defenders Office filed a greenwashing complaint with the Australian Competition and Consumer Commission on behalf of the not-for-profit advocacy group Climate Integrity on Wednesday.
The consumer watchdog is being urged to investigate whether Qantas passengers have been tricked into buying ineffective offsets.
The complaint claims the airline is misleading customers by charging them extra to "fly carbon neutral" and by promoting itself as sustainable while having no credible plan to reach net-zero emissions by 2050.
Qantas already uses sustainable fuel, but critics argue that's not enough to reach net zero by 2050. (Joel Carrett/AAP PHOTOS)
Climate Integrity director Claire Snyder said Qantas was a household name and it shouldn't mislead customers and shareholders into thinking its services were more sustainable than they really were.
The airline's carbon-offset program involves purchasing offsets that "remove, reduce or avoid emissions" by donating to projects outside the aviation sector, according to its website.
The projects include bushfire relief, rainforest conservation and food drives.
Customers who chose the carbon-neutral option might wrongly think the climate impacts of their trips had been compensated for through the purchasing of temporary offsets, Ms Synder said.
"But this is not supported by science and therefore distorts customers' perception of the sustainability of flying," she said.
Qantas's primary method of reducing emissions is the use of sustainable aviation fuel, which it says reduces emissions by up to 80 per cent.
However, the watchdog complaint says the airline's reliance on biofuels is not a viable method to achieve net zero by 2050, as the fuels are not commercially available in Australia.
The production of sustainable aviation fuels is set to provide less than two per cent of global air travel fuel use by 2027, according to the International Energy Agency.
Qantas says offsets are an interim measure as sustainable fuel production increases.
"We have always acknowledged that aviation is a particularly hard-to-abate sector but we have a responsibility to do what we can with what's available now," a spokeswoman said.
Swinburne University professor Hussein Dia said cases of greenwashing extend well beyond Qantas's alleged actions.
"Carbon offsets adopted by many organisations as solutions for reducing emissions have been consistently found to be over-rated and in some cases to be scams," he said.
"They only marginally reduce the negative environmental impacts and give the wrong impression that the organisation has sustainable practices in place."
The focus should instead be on shifting to lower emissions technologies and changing social norms of flying, Prof Dia said.
"(We need to) reduce the demand for airline travel and other emissions-intensive travel activities," he said.
The complaint urges the watchdog to follow a landmark European greenwashing decision against KLM Royal Dutch Airlines in March, which found offsetting and other airline sustainability claims to be misleading.
The European watchdog has since launched action against 20 airlines
A consumer commission spokeswoman said the organisation would not comment on individual investigations but it would continue to ensure that any environmental or sustainability claims made by companies were accurate.
"As the Australian economy is focused on transition to net zero and reducing environmental harm, the ACCC is focusing its attention on competition and consumer law issues that complement this transition," she said.
In November, the consumer watchdog announced it would be cracking down on greenwashing and months later launched legal action against Clorox Australia.
It alleged the company had breached consumer law over "ocean plastic" claims on Glad kitchen tidy and garbage bags, which have since been withdrawn from sale.
Qantas publishes a sustainability report each year.
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