UAE’s Climate Change Reduction Law: A Commitment to a Sustainable Future

Date Posted:Tue, 17th Jun 2025

UAE’s Climate Change Reduction Law: A Commitment to a Sustainable Future

The UAE has introduced a landmark climate law requiring all entities, including those in Freezones, to monitor, report, and reduce their greenhouse gas emissions by May 2025. Aligned with the UAE Net Zero 2050 strategy and the Paris Agreement, this regulation reinforces the country's leadership in sustainability and offers businesses clear compliance guidelines, cost-saving opportunities, and access to green investment.

 

1. Global Context

  • Governments worldwide are increasingly assuming responsibility for enacting legislation and policy frameworks aimed at mitigating the impacts of climate change. This underscores the critical role nations play in managing greenhouse gas (GHG) emissions in alignment with the Paris Agreement. These regulatory measures often extend to various industries and sectors, mandating both public and private entities, particularly those in key sectors, to monitor and reduce their emissions.

2. UAE’s Leadership in Sustainability

  • The UAE has emerged as a leader in sustainability and climate action. Federal Decree-Law No. (11) of 2024 requires all entities, including those in Freezones, to measure, track, and manage their carbon emissions. This law supports the UAE’s Net Zero 2050 strategy, NDCs, and the Paris Agreement. By complying, companies can save costs through energy efficiency, access green financing and sustainability investments, and enhance their brand reputation.

3. Key Requirements of the Law

  • Effective 28 August 2024, a new law requires UAE businesses to measure, track, and manage their greenhouse gas (GHG) emissions. This supports national sustainability goals by enforcing adherence to carbon neutrality targets. Companies must implement emission reduction strategies and comply with updated national and sectoral goals.

4. Compliance Requirements

  • The legislation applies to all public and private sector entities operating within the UAE, including individual enterprises whose activities contribute to GHG emissions. Compliance will be required from 30 May 2025. Under the decree, organizations must:
    • Monitor and report emissions: Timely measure, report and submit emission data in line with the government of UAE guidelines.
    • Develop emission reduction strategy: Implement measures to reduce emissions, such as adoption of renewable energy sources, CCUS, and engaging in carbon offsetting programs.
    • Maintain Records: Companies are obliged to keep their emissions records for at least 5 years and ensure accessibility for government audits.
    • Avoid Penalties: Non-compliance will result in financial penalties from AED 50,000 to AED 2000,000. Repeated offenses will result in higher fines.

5. Supporting Frameworks and Resources

  • United Arab Emirates Legislations | Federal Decree-Law on the Reduction of Climate Change Effects
  • The UAE’s Net Zero 2050 Strategy | The Official Portal of the UAE Government
  • The Paris Agreement | UNFCCC
  • The United Arab Emirates’ Third Nationally Determined Contribution (NDC 3.0), Accelerating Action Towards Mission 1.5C (November 2024)
  • Principles for the effective management of climate-related financial risks | CBUAE Rulebook
  • DFM’s Guide to ESG Reporting (2023)
  • Abu Dhabi Securities Exchange, Environment, Social and Governance (ESG) Disclosure Guidance for Listed Companies

If you would like to find out more information contact Waseem Hoeneini at [email protected]