From the Virgin site:
What you can do
Flying like many other forms of transport impacts the environment because the fuel used by airlines results in the release of carbon dioxide (CO2) and other emissions into the upper atmosphere. Virgin Blue and our international airlines, Pacific Blue and Polynesian Blue have set our own challenge to further reduce greenhouse gas emissions related to our business. Now we also offer our Guests the opportunity to offset emissions related to flights taken with any of our three airlines.
If you would like to offset your flight, all you have to do when booking with us is click on the link on the Virgin Blue Travel Itinerary page to opt to offset the carbon emissions relating to your flights. You will then be taken to the Carbon Offset Checkout page which will advise you of the cost of offsetting emissions relating to the sectors you are planning to fly. Once you have provided your credit card details, you then simply click to accept the charge and a tax invoice is generated and sent to you via email.