Why Qantas breathed a sigh of relief over its Sunrise flights

Qantas executives could be forgiven for breathing a sigh of relief after Brussels just stopped short of imposing its full carbon price on the world’s longest international flights.

The European Commission had planned to extend the European Union Emissions Trading System (EU ETS) to all flights departing the bloc. Instead, a new proposal issued last week would apply from 2029 only to international flights serving destinations less than 5,000km from the centre of the EU.

That’s a crucial distinction for Qantas. Any future Project Sunrise service between Sydney and an EU city such as Paris would sit far beyond that limit - and therefore remain outside the expanded European carbon market.

The reprieve matters because Project Sunrise is built around ultra-long-haul flying. Qantas has ordered 12 specially modified Airbus A350-1000ULR aircraft capable of connecting Australia’s east coast directly across the globe. The first service, Sydney-London, is scheduled to begin in October 2027, with Sydney-New York to follow.

London is no longer in the EU, so that inaugural route would not have been directly captured by the European proposal - although it’s pretty likely that today’s more EU-leaning and environmentally aware UK would follow suit. For now though, the aviation coverage in its own emissions trading system doesn’t extend to a non-stop London-Sydney sector.

And anyway, Project Sunrise has always been planned as a broader network rather than a two-route experiment. Qantas has previously identified Paris and other European cities among its ultra-long-haul destinations.

Without the limit a Qantas aircraft departing Paris for Sydney could have faced a carbon liability across a journey of roughly 17,000 kilometres. The cost would depend on fuel burn, verified emissions and the prevailing price of European carbon allowances, but it would have been substantial.

That would be uncomfortable for Project Sunrise because its economics are already finely balanced. The A350-1000ULR must carry enough fuel to remain airborne for as long as 22 hours and Qantas has limited the cabin to only 238 passengers - far fewer than an A350-1000 can carry in a conventional configuration.

The reduced capacity makes for more individual space for passengers, including six first-class suites, 52 business suites and a dedicated wellbeing zone for cattle class. It also helps the aircraft manage payload and range demands. But fewer seats mean the cost of the flight, including any carbon charge, must be recovered from a smaller passenger base.

Project Sunrise therefore depends heavily on premium fares. A large new carbon bill could have narrowed margins, pushed ticket prices higher or weakened the business case for adding continental European destinations.

The Commission’s compromise avoids that immediate threat. (It also avoids upsetting President Trump on an issue that is especially woke, when global warming is a scam.)

Following much pressure from EU airlines already in line to be slugged the full rate, the EU ETS would expand beyond flights within Europe for the first time, but instead of being for all flights, it would be geographically limited. There’s absolutely no logic to the limit - quite the reverse - but other factors are at play.

But here’s the resulting bonus for Project Sunrise: a service from Paris to Dubai would be included, for example, while one from Paris to New York - or Sydney - would not. That would give a commercial edge, possibly substantial, to the longer haul flight.

In other words, Gulf airlines operating from European cities to hubs like Dubai and Doha (for example on a QF code with Emirates, or a VA code on Qatar Airways) would have to pay European carbon costs. Meanwhile, Qantas aircraft flying non-stop from Europe to Australia would remain exempt.

A non-stop flight of almost 20 hours consumes an enormous quantity of fuel, with emissions to match. So, there’s no way the distinction can be defended environmentally. Long-haul services account for a disproportionate share of aviation emissions, yet the 5,000-kilometre boundary exempts the longest flights from the EU’s strongest carbon-pricing mechanism.

In fact the campaign group “Transport & Environment” estimates 47% of European aviation emissions would escape under this exemption, also costing the EU about €4.2 billion in lost revenue. It described the limited expansion as an “inadequate response” to the Commission’s own finding that the international system, CORSIA, the Carbon Offsetting and Reduction Scheme for International Aviation is failing to deliver credible reductions. CORSIA relies heavily on offsets.

So, even though the Commission said the CORSIA is ineffective, it’s now choosing not to apply the EU ETS to every departing long-haul flight, mostly because of industry resistance and the diplomatic consequences (read primarily the Trump Administration and US airlines, but others too). The last thing the Europeans need right now is another battlefront with the US.

The Commission plans to review aviation emissions policy again in 2032, so it’s possible longer routes could eventually be captured. The proposal must also pass through the EU’s legislative process, so its final form is not guaranteed.

For Qantas, then, the relief is real but conditional. Project Sunrise escapes the immediate prospect of paying Europe’s carbon price over almost the entire distance from Europe to Australia. That protects the economics of potential future services and delivers at least a modest advantage over one-stop competitors. Qantas has won time - not permanent immunity.

And time is just what Qantas needs. It will take well into the 2030s before the new aircraft can fill up with 100% Sustainable Aviation Fuel, SAF – there just isn’t enough of it, and even if there were, it’s prohibitively expensive and still isn’t emission-free.

But it does not settle the larger argument. As governments search for ways to reconcile rising demand for long-distance travel with climate targets, the world’s longest flights will remain obvious targets. And meanwhile the world will be that bit warmer.