Japan Airlines Co. will replace jet fuel with alternative energy sources for all domestic flights from 2040 under its plan to achieve carbon neutrality in 2050, sources familiar with the matter said Friday.

The major Japanese airline, which is drawing up a concrete road map to that end, is also seeking to use hydrogen derived from renewable energy sources as fuel to fly small aircraft from 2035, the sources said.

The alternative energy sources under consideration are fuel derived from waste plastic as well as one made from waste oil and household garbage. By 2030, JAL is aiming to make sure such fuels account for 10 percent of the airline's energy use, the sources said.

JAL is already working with trading house Marubeni Corp. in the development of waste plastic-derived fuel with its production goal set for around 2027.

A growing number of companies are stepping up their efforts to reduce greenhouse gas emissions in line with Japan's goal of bringing carbon dioxide emissions to net zero by 2050.

Aircraft emit large quantities of CO2 and the airline industry faces the urgent need to drastically cut them. JAL is expected to include the road map in its mid-term business plan to be unveiled May 7, according to the sources.

For now, companies import jet fuel from overseas. Facilitating the switch from conventional jet fuel to a new type of fuel from waste plastic still presents a host of challenges.

Funding is one of them, as huge investments are required before the fuel can be produced in Japan in a sustainable manner.

JAL is considering tapping a government-led 2 trillion yen ($18 billion) fund designed to spur innovation to tackle environmental issues, the sources said.

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The airline also plans to secure supplies of fuel derived from waste oil and garbage -- an area in which U.S. and overseas companies have strength -- by investing in a partner firm among other options, the sources said.

JAL announced its goal of reducing CO2 emissions to net zero in 2050 in June last year, with one of its major pillars being scaling down the use of plastic. Other planned efforts include switching to aircraft with better fuel efficiency and introducing new fuels.

Japanese companies are starting to pay more attention to the environment. Investors are increasingly looking at how companies tackle social and environmental issues along with governance.

For airlines, the trend comes at a challenging time as the coronavirus pandemic has depressed travel demand globally and their earnings have taken a severe hit.

In the nine months to Dec. 31, JAL reported a net loss of 212.72 billion yen as the number of passengers plunged.