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Qantas, Australia's flag carrier, Tuesday agreed on a deal to buy almost 20 million litres of sustainable aviation fuel (SAF) from US biofuels company Aemetis each year from 2025.

The sustainable fuel, which comes from certified feedstock from waste products and then blended with normal jet fuel, will be used to help reduce carbon emissions on Qantas flights from Los Angeles and San Francisco to Australia, reports Xinhua news agency.

This is Qantas' second major offshore purchase of SAF with flights from London already using a blend of sustainable fuel since the start of this year.

Its previous deal saw Qantas purchase 10 million litres of SAF in 2022 with an option to purchase up to another 10 million liters in 2023 and 2024.

Qantas Group CEO Alan Joyce said the company was looking to source more SAF for its operations, but that was only possible overseas given it was not available to be produced locally.

"Operating our aircraft with sustainable aviation fuel is the single biggest thing we can do to directly reduce our emissions," Joyce said.

SAF produces up to 80 per cent fewer emissions than traditional jet kerosene and is compatible with Qantas' existing aircraft.

The airline has already committed A$50 million to support the development of a SAF industry in Australia and has aimed to be net carbon neutral by 2050.

"For now, SAF is more expensive than traditional fossil fuels but with the right investment it could grow to a scale where the cost is on par," added Joyce.