Carbon rules begin to bite, just as the Climate Consensus collapses
7 action points for corporate travel buyers: A FACTS Report
FACTS takes place in Sydney, 25-26 November at the ICC
ANZ’s Carbon Enigma
For Australian and New Zealand companies, carbon has stopped being optional. But that’s happening just as the world has stopped agreeing on it.
Mandatory climate reporting has become law in both countries, and auditors, regulators and investors are checking the numbers.
At the same time, the global consensus behind the Paris Agreement is in tatters. High interest rates, stretched budgets are causing governments to be wary of unpopular policies and the world's second-largest emitter has spat the dummy.
The pressure on business travel comes from above and below. Air travel is often one of the largest and most visible lines in a services company's emissions inventory. It‘s also the line where management has the most discretion.
This FACTS report covers what the rules require, why the wider environment is so hostile, and what travel buyers and airlines can and should realistically do.
Now push has become shove…
Australia now requires climate reporting under the Corporations Act, using the AASB S2 standard.
The rollout comes in three waves:
Group | Who | First reporting periods from |
1 | Largest listed companies and large emitters | 1 January 2025 |
2 | Two of: (1) revenue AUD200m+, (2) assets AUD500m+, (3) 250+ staff | 1 July 2026 |
3 | Smaller large entities | 1 July 2027 |
Group 2, which covers thousands of mid-sized private and listed firms, entered its first reporting year three months ago.
Scope 3 emissions, which include business travel, become mandatory from each entity's second reporting year.
For Group 2, that means data collected from July 2027 must stand up to scrutiny. A three-year modified liability period limits enforcement of Scope 3 disclosures to regulators, but it does not excuse sloppy numbers.
New Zealand has recently gone in the opposite direction. The listed-issuer threshold (companies which have to comply) rose from NZD60m to NZD1bn, managed investment schemes were taken out of the regime, and directors no longer carry deemed liability. The number of reporting entities roughly halves, from 164 to 76.
The large banks, insurers and listed companies that remain still need to report, and they push data requests down to their suppliers. Even with fewer companies reporting in New Zealand, those that still do will ask their suppliers for emissions data. (And companies operating in both countries should build to the stricter Australian standard and re-use it in New Zealand.)
For TMCs, the result is the same in both countries. Finance and sustainability teams will ask for flight-level, auditable emissions data, not estimates based on spend.
… but everything else is pulling the other way
Money is expensive again. In September the Reserve Bank of Australia raised the cash rate to 4.60%. It was the fourth increase of 2026, taking the rate to its highest level since 2011, driven partly by energy-led inflation, as well as government and private spending.
Meanwhile, decarbonisation projects like electrifying fleets, renewable energy and SAF plants are capital-heavy and the pay back takes years. Every rate rise makes them harder to justify against the more immediate cost of servicing debt. Governments face the same problem: as deficits grow, it’s easy to save by cutting subsidies for emissions reduction.
The US has taken its bat and gone home. The Trump administration withdrew from the Paris Agreement for a second time. At the UN in September 2025, the President called climate change "the greatest con job ever perpetrated on the world”. In February 2026, the EPA repealed the 2009 Endangerment Finding, the legal basis for most federal climate regulation (although the repeal is now being challenged in court).
The Paris goals are slipping. UNEP's 2025 Emissions Gap Report projects 2.3–2.5°C of warming even if every national pledge is fully delivered, and up to 2.8°C under current policies. The US withdrawal alone cancels about 0.1°C of the improvement since the previous report. The 1.5°C limit is now almost certain to be exceeded, at least temporarily.
All the while, the obligations on Australian companies haven’t moved. A company’s board can’t just point to Washington when its auditor asks for Scope 3 data.
The good news: oil is doing what policy couldn’t
The Middle East war and the Strait of Hormuz and blockages have achieved something governments avoided: a high carbon price. Brent Crude rose from about USD72 to nearly USD120 at its peak. It continues to hover around USD100. But the crack-spread, the gap between crude and refined fuel, widened making jet fuel about 50% up on last year to over USD150/barrel. That makes fuel about a third of airline costs.
The effects in Australia are direct. Qantas flagged up to AUD800m in extra fuel costs by June, raised fares and cut regional routes. Virgin trimmed domestic flights. At FCM's August buyer forum in Sydney, buyers ranked airfare volatility as their top concern.
This matters for climate strategy in two ways:
Costs and carbon emissions. Reducing travel, shifting a flight to economy or a two-day visit into one saves money and emissions at the same time. Travel policies that were hard to sell as green initiatives are easier to sell as cost control.
The SAF price gap narrows when fossil fuel is expensive. Expensive fossil jet fuel reduces the gap to SAF prices (at least by a bit), and fuel security has become a national question. Australia holds about 30 days of jet fuel stock.
Airlines: SAF’s a rounding error and offsets are, well…
The brutal truth: SAF offers the only real reduction, but it is scarce and expensive. Offsets are cheap and plentiful, but they reduce nothing on paper that auditors care about.
SAF is still a rounding error. Global SAF production reached 1.9 million tonnes in 2025 and is forecast at 2.4 Mt in 2026; that might sound a lot, but it’s only 0.8% of jet fuel usage. It costs about twice as much as fossil jet fuel, and up to five times as much in markets like Europe where its use is mandated. Airlines expect to spend USD4.3bn on SAF this year, plus USD1.2–1.6bn on CORSIA, the UN offsetting scheme for international aviation.
Australia is late but moving - slowly. Canberra committed AUD1.1bn over ten years through the Cleaner Fuels Program, with production incentives and first local drop-in fuel expected around 2029.Qantas targets 10% SAF by 2030. Its SAF Coalition lets corporate clients such as Accenture, Deloitte and Commonwealth Bank buy SAF attributes through a "book and claim" system and count them against business travel emissions.
SAF vs Offsets – or Smarter Flying
Option | What it does | Counts as a reduction under AASB S2? | Best use |
SAF certificates (book and claim) | Pays for real fuel substitution, about 80% lower life-cycle emissions | Increasingly accepted against Scope 3 targets; methods still settling | Top routes, top travellers, with an airline partner |
Carbon offsets | Funds reductions or removals elsewhere | No. Gross emissions are reported; credits are disclosed separately | A supplement for residual emissions, high-integrity only |
Flying less or smarter | Removes the emissions altogether | Yes, directly | Always first, and it saves money |
Is SAF worth it? For a corporate buyer, yes, in measured amounts. A modest annual SAF commitment through an airline programme turns a cost line into a credible, auditable reduction story. It also gives the buyer leverage in airline negotiations.
Offsets should just be treated as a reputational extra, not a compliance tool.
What companies should do now. No need to be a hero
Compliance doesn’t need heroic spending. It needs good data, a defensible method and a credible plan. In order:
Fix the data first. Ask your TMC for flight-level emissions covering route, cabin, aircraft and distance, not estimates based on spend.
Agree on one calculation method, such as ISO 14083 or the DEFRA factors with uplift, and keep it consistent year to year. Auditors care more about consistency than precision.
Start the Scope 3 clock. Group 2 companies need clean data from July 2027. The data you collect this year is next year's baseline.
Make policy changes that also cut cost. Use economy for flights under four hours, combine trips, choose the most efficient carrier and aircraft on contested routes, and use rail or videoconferencing where they work. In 2026, every one of these has a business case without the carbon argument.
Put carbon into airline and hotel contracts. Ask for SAF options, emissions reporting and efficiency data in RFPs. Corporate volume is leverage, and airlines need guaranteed demand.
Buy SAF deliberately. A small, recurring book-and-claim commitment on core routes shows real reduction and supports the local industry.
Use offsets carefully, if at all. Choose verified, high-quality removals and disclose them separately. Never present them as reductions.
Report honestly. Disclose the method, its assumptions and its limits. During the modified liability period, a transparent estimate is safer than a confident but wrong number.
COP31: Australia takes the chair, sort of
COP31 runs from 9 to 20 November in Antalya, Türkiye, under an unusual shared arrangement. Türkiye's Murat Kurum is COP President, and Australia's Chris Bowen is "President of Negotiations" with authority over the talks. The Pre-COP is taking place in Fiji this week, 5–8 October, with a leaders' event in Tuvalu.
What to watch:
Australia's credibility. Australia will be steering the global talks. That makes it politically harder for Canberra to soften domestic reporting rules or SAF support. In other words, companies can’t expect any softening of the regulatory requirements
The US con job absence. Keep an eye on whether the other major economies fill the gap - or quietly lower their ambition.
Carbon markets. Rules for international credits (Article 6) affect which offsets will be credible.
Fuel security. After Hormuz, expect energy security, not just emissions, to be the case for SAF.
The bottom line for travel buyers:
The global politics are volatile, but the domestic obligation is fixed.
The companies that cope best will treat carbon data the way they treat financial data: complete, consistent and auditable.
They will also take advantage of cutting emissions and cutting cost in the same decision.
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