Carbon tax bad for airlines: Qantas

Qantas Airways chief executive Alan Joyce says.

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AUSTRALIA should not go it alone on a carbon tax that will negatively affect airlines and instead invest in sustainable fuels to help beat emissions, says Qantas chief executive Alan Joyce.

Mr Joyce said on Wednesday that regions or individual countries introducing carbon tax or emissions trading scheme would distort the aviation industry.

The International Civil Aviation Organisation has set a goal of capping emissions from international aviation beginning in 2020 while gradually improving fuel efficiency.

Meanwhile, despite promising not to proceed with a carbon tax during the federal election campaign, Prime Minister Julia Gillard has said the government looks set to press ahead to put a price on carbon.

Mr Joyce told reporters in Brisbane: "Having regions or individual countries imposing an emissions trading scheme or a carbon tax can cause distortions for the industry and will cause distortions to the industry and they have a negative impact.

"It needs to be a global approach."

When asked if a carbon tax would have a negative effect, Mr Joyce said: "Of course it will - we're one of the biggest users of fuel.

"What I think is going to be important is that Australia doesn't go on its own and employs a tax that causes distortion and competition."

The airline industry, which is one of the biggest emitters of carbon dioxide, was more than aware of its impact on the climate and had tested sustainable fuels.

Qantas alone spends $3 billion on aviation fuel, which could easily transfer over to sustainable fuels, he said.

"One of big things that we need government support on, private industry support on, is sustainable fuels going forward," he said.

"This is an area we need to encourage people to move on - not just putting in a tax to try to encourage people to move in a direction, but helping people that have made a commitment to get there with the right investment."

Australia has the landmass, technology and expertise to create an alternative to aviation fuel and Qantas had already positively tested algae-based and ethanol-based technology, he said.