Aviation companies should start preparing now for a set of legal and commercial risks tied to carbon markets, according to a Morgan Lewis analysis published on 5 November 2026. The law firm points to two developments moving at once: CORSIA is due to enter its next phase in 2027, and European Union carbon rules for aviation are still changing.
Morgan Lewis advises airlines, aircraft lessors, investors and other industry participants on carbon market compliance, credit purchasing and project investment, contractual risk allocation, and emissions and sustainability requirements. Its analysis sets out what the firm sees as the main issues the sector will face as it moves into 2027.
Why it matters
Carbon compliance is no longer a narrow environmental matter handled at the edges of an airline's business. Under the framework Morgan Lewis describes, it reaches into contracts, capital spending and public statements about sustainability.
The firm warns that stakeholders should expect eligibility requirements to shift, compliance duties under different regimes to overlap, and commercial risk to grow around the purchase of carbon credits. Each of those pressures can create exposure if it is not planned for.
The timing adds urgency. CORSIA's next phase begins in 2027, while EU regulations continue to develop. Companies that lock in long-term arrangements before the rules settle could find themselves bound to terms that no longer fit.
Contracts, due diligence and the credit question
Morgan Lewis's central recommendation is flexibility. The firm says long-term agreements should be structured so they can absorb regulatory change rather than assume today's rules will hold.
That applies to carbon credit procurement in particular. Buying credits is a commercial transaction, but the value of what is bought depends on whether the credits qualify under the rules in force at the time of compliance. If eligibility criteria move, a contract that looked sound at signing may not deliver what the buyer needs.
The firm also calls for stronger due diligence and better documentation. In practice, that means companies should be able to show what they bought, from whom, and on what basis, and should keep records that stand up if a claim or a compliance question arises later.
A third point is coordination. Morgan Lewis argues that carbon procurement, fuel strategy and environmental communications should be managed together rather than in separate silos. The three are connected: fuel choices affect emissions obligations, credit purchases are used to address what remains, and public claims about environmental performance must match what the company can actually substantiate.
That last link carries its own risk. Environmental claims made in marketing or investor materials can become a legal problem if the underlying credits or emissions data do not support them. Treating communications as part of the compliance process, rather than as a separate function, is the firm's suggested approach.
A crowded rulebook
The Morgan Lewis analysis arrives alongside wider coverage of friction between regional and global aviation carbon regimes. Other outlets in the same news roundup examined the relationship between European climate regulation and international airline cooperation, and the tension between ICAO's global approach and the EU's emissions trading system.
Morgan Lewis does not take a position on those disputes in the material reviewed. Its focus is practical: whatever the outcome of the political arguments, individual companies still have to comply with the rules that apply to them, and they have to do so under contracts they have already signed.
The firm's framing suggests the industry's challenge is less about choosing between regimes than about operating under several at once. Overlapping obligations mean a single flight or a single credit purchase may need to satisfy more than one set of requirements, and a structure that works for one may not work for the other.
For lessors and investors, the questions are different again. Lease terms, financing arrangements and investment decisions may all carry carbon-related assumptions that need to be tested against a moving regulatory baseline. Morgan Lewis lists investment decisions among the areas affected by these frameworks, alongside contractual arrangements and environmental claims.
The firm's overall message is that regulatory uncertainty is not a reason to wait. It is a reason to build agreements and internal processes that can adapt. Flexibility in long-term contracts, rigorous checks on counterparties and credits, clear records, and a joined-up approach to carbon, fuel and messaging are presented as the practical defences available to companies facing rules that are still being written.
What to watch: how CORSIA's next phase is implemented in 2027, and whether EU aviation carbon rules settle into a stable framework or keep shifting.
