The huge growth in flights from Heathrow’s planned new runway could be carbon neutral, according to an ambition revealed by the airport.

The 260,000 extra flights a year anticipated from the third runway would make the airport the UK’s largest source of carbon emissions. But Heathrow’s new sustainability plan suggests other ways to offset the leap in emissions, including by restoring British peat bogs.

The new plan, called Heathrow 2.0, sets a wide range of targets to tackle carbon emissions, illegal levels of local air pollution, and noise. The airport will use 100% renewable electricity from April and aim to get 35,000 more people a day using public transport rather than arriving in cars by 2030 and double that by 2040.

The third runway, now backed by the government, is highly controversial, with critics arguing it could dash hopes of meeting the UK’s climate change targets and solving local air pollution problems. About 95% of Heathrow’s carbon emissions come from aircraft, but aviation is one of the toughest sectors in which to cut carbon, as the electric batteries than can power cars are too heavy for planes.

John Holland-Kaye, the chief executive of Heathrow, said: “We are not doing this to convince somebody that we are anything we aren’t. We are setting out what we are going to do and people can judge us by our actions. We are going to play our part in the challenge of climate change.”

The plan sets out firm short-term targets, including removing the last 5% of flights made by the most polluting aircraft by 2020 and cutting the number of late-running flights arriving in the middle of the night – currently about one a day – by half this year.

The aspiration to make growth from the new runway carbon-neutral relies significantly on the global aviation deal agreed in October to offset most new emissions after 2020. The most novel aspect of Heathrow’s new plan to explore the restoration of peatlands in the UK to offset carbon, which would be “a very British solution”, said Holland-Kaye.

Peatlands cover 12% of the UK but 80% are in poor condition. “The opportunity is absolutely massive,” said the environmentalist Tony Juniper, who was a paid consultant on Heathrow’s new plan. “The vast majority of peatlands are degraded and it is releasing billions of tonnes of carbon over decades.” He said restoration would also benefit flood prevention and wildlife.

Holland-Kaye said it was vital to also set out longer term plans even if it was unclear as yet how to achieve them: “There are some really challenging aspirations around carbon, and even if we don’t get all the way there, every tonne of carbon we are able to prevent going into the atmosphere is a tonne less that our children have to deal with.”

Andrew Pendleton of Friends of the Earth said: “We have to say, that if you look at this coldly, it makes Heathrow one of the most progressive airports in the world. But there is a jumbo-jet sized elephant in the room – a new runway that would see 260,000 extra flights a year, and that comes at a significant environmental price.”

“It is deeply irresponsible of the government to sign off on this expansion on the assumption that something will come along” to solve the challenges, he said. A cross-party committee of MPs recently accused the government of “magical thinking” over the future solutions to Heathrow’s environmental challenges.

Tim Johnson of the Aviation Environment Federation said: “The plan aspires to a cleaner and quieter future but its detail is largely concerned with short-term, incremental improvements that are not up to the challenges that would come with runway expansion. There is nothing in this report to suggest that we are any closer to finding effective solutions.”

Holland-Kaye said Heathrow’s passenger numbers have grown by 80% since the early 1990s, but that road traffic to the airport has stayed broadly the same, thanks to new public transport links.

“If you have a plan and you really focus on it, you can make a significant change in people’s behaviour,” he said. “The great thing about the VW scandal is that the government is now taking [air pollution] seriously, because they are the ones who can have the most influence. Once the will of government gets behind these things, big things can happen relatively quickly.”

The new runway would open by 2025 at the earliest, and Holland-Kaye said the new HS2 train line and possible new rail links to the west and south could be a “gamechanger”.

Heathrow is planning to increase the number of short-haul flights within the UK, and will discount their landing fees this year. Critics say such flights should be replaced by rail travel but Holland-Kaye said they were important in helping all regions of the UK to grow. “Unless we have an economy which pays for a shift to being low-carbon, we are not going to make that shift,” he said.

The Heathrow plan is “bold and brave”, according to Juniper: “The difference here is the extent to which they have really embraced the challenge rather than trying to avoid taking responsibility.” Asked if fast-growing aviation can ever be sustainable, he said: “It is going to have to be” because stopping more people flying “is not going to happen”.