Navigating the intersection of global trade and climate action: assessing the compatibility of CORSIA with international trade law for sustainable aviation

Purpose The study aims to assess the legal compatibility of Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) with World Trade Organization (WTO) rules, addressing gaps in the existing literature by systematically analyzing trade law implications of its carbon offset mechanisms, sustainable aviation fuel (SAF) mandates and differentiated obligations. It proposes reforms to reconcile climate action with equitable trade governance. Design/methodology/approach This interdisciplinary study uses textual analysis of WTO agreements and CORSIA resolutions, conceptual interpretation of trade-climate norms and comparative case analysis. A novel legal–policy interface framework evaluates CORSIA’s governance against WTO principles, supplemented by a Trade Restrictiveness Index (TRI) to quantify compliance cost disparities. Findings CORSIA’s exemptions for least-developed countries and their credit eligibility criteria risk violating WTO nondiscrimination principles. SAF mandates may breach the Technical Barriers to Trade and Subsidies and Countervailing Measures Agreements. Ambiguities in baseline adjustments and certification standards threaten market fragmentation. Reforms include harmonized SAF standards, capacity-building for carbon credit producers and transitional exemptions aligned with WTO jurisprudence. Practical implications Policymakers must align CORSIA’s exemption frameworks with WTO equity principles, adopt technology-neutral SAF standards and establish multilateral carbon credit equivalency mechanisms. Institutional reforms, such as ICAO–WTO joint committees, can preempt trade disputes while advancing aviation decarbonization. Social implications Balancing climate urgency with developing states’ economic growth needs is critical. Equitable access to SAF technologies and carbon markets can mitigate Global North–South disparities, fostering inclusive multilateralism in green transitions. Originality/value This study pioneers a systematic legal analysis of CORSIA-WTO interactions, introducing a novel framework and TRI. It bridges climate governance and trade law scholarship, offering actionable reforms to strengthen the coherence of sustainable aviation policies within the rules-based trading system.