Morgan Lewis, one of the world’s largest aviation law firms, has ranked sustainable aviation fuel (SAF) scalability and carbon market oversight among the ten most critical legal and operational risks facing airlines in 2026, in a new industry briefing published this week.
The firm’s annual airline analysis — which spans cybersecurity, AI liability, labour disputes, tariffs, and antitrust exposure — identifies SAF as central to airline decarbonisation strategies while flagging production shortfalls as a persistent and commercially consequential constraint.
“SAF remains central to decarbonization strategies but faces production constraints relative to projected demand,” the briefing states. “Scaling challenges for SAF persist, including specifications, delivery logistics, risk allocation, title transfer, and supply shortages.” The firm concludes that “decarbonization efforts hinge on sustainable aviation fuel scalability and carbon market oversight” — a framing that treats SAF not as a sustainability ambition but as a live legal and financial exposure.
“Decarbonization efforts hinge on sustainable aviation fuel scalability and carbon market oversight.” — Morgan Lewis, Top 10 Airline Industry Considerations 2026
The inclusion of SAF in a top-ten risk list alongside cyber incidents and AI insurance gaps signals a broader shift in how aviation’s legal community views the fuel transition. Airlines that cannot secure adequate SAF supply now risk non-compliance with binding mandates — the EU’s 2% SAF obligation already in effect, the UK’s 2% mandate (rising to 10% by 2030 under the SAF Act 2026), and CORSIA Phase 1 compliance — each carrying potential financial penalties.
The supply chain framing is particularly significant. Morgan Lewis specifically calls out risk allocation and title transfer — the contractual structures that govern fuel ownership and liability at each point in a blended supply chain. These questions are increasingly central to airline-producer SAF agreements, especially as carriers attempt to lock in long-term offtake commitments for production capacity that does not yet exist at scale.
Carbon market oversight appears as a parallel risk. As airlines face obligations under CORSIA and the EU Emissions Trading System, the integrity and enforceability of carbon credit markets — and the degree to which SAF certificates can satisfy these obligations — are becoming active legal questions rather than theoretical ones.
The Morgan Lewis briefing covers ten risk areas in total. That SAF sits alongside cybersecurity, tariff disruption, and AI liability in that list is a measure of how far the fuel has moved from sustainability programme to boardroom-level compliance imperative in just a few years.
Source: Morgan Lewis
