In 2021, the UAE made history as the first country in the Middle East and North Africa region to commit to achieving net-zero emissions by 2050. That bold vision has taken legislative form now with the introduction of two key climate laws: Federal Decree-Law No. (11) of 2024 on reducing the effects of climate change, and Cabinet Resolution No. (67) of 2024, which establishes the National Register for Carbon Credits (NRCC). With these instruments, the UAE is aligning its actions with global climate commitments and cementing its role as a global sustainability leader.
For businesses across the country, this marks a critical turning point. Climate responsibility can no longer be viewed as a peripheral concern; it’s now central to strategic planning. Companies must integrate climate risk assessments, emissions reduction targets, and robust sustainability frameworks into their operations to remain competitive and resilient in a low-carbon economy.
Climate action as a shared mandate
At its core, the new law makes climate action a shared mandate. The law applies across all emirates and economic zones – including free zones – and covers any source of greenhouse gas emissions. This includes public and private entities, facilities, and businesses of all sizes. In short, if your operations generate emissions, you fall within the scope of this legislation.
Starting May 30, 2025, all entities – regardless of size or sector – must measure, report, and manage their emissions. Some will be identified as “significant emitters” and will be required to take on additional responsibilities such as setting up and maintaining a verified emissions inventory, submitting regular emissions reports, and putting in place mitigation measures such as improving energy efficiency, switching to clean energy, adopting carbon capture and storage technologies, using carbon offsets, and protecting natural carbon sinks. Businesses are also required to keep emissions records for at least five years and align with the monitoring systems established by the Ministry of Climate Change and Environment (MOCCAE).
Non-compliance won’t go unnoticed. Fines can range from AED 50,000 to AED 2 million, with stiffer penalties for repeat offenders. But the emphasis here is not just on enforcement – it’s on opportunity. The law encourages to comply by providing incentives for entities to adopt clean technologies and reduce emissions. Incentives for emissions reduction include facilitating carbon offsetting activities, adopting emissions trading, and promoting technologies for emissions reduction.
A national carbon market takes shape
The UAE’s establishment of a National Register for Carbon Credits is also a region-first move. The NRCC creates a formal structure for measuring, verifying, and trading carbon credits, an essential tool for businesses looking to offset emissions while investing in sustainable practices.
If your company emits 500,000 metric tons or more of CO₂-equivalent per year from Scope 1 and 2 emissions, registration in the NRCC is mandatory.
These high emitters must track their emissions using internationally recognised methodologies aligned with the Intergovernmental Panel on Climate Change, submit annual reports to the MOCCAE, and have their data independently verified by accredited third-party agencies.
Even if a major emitter chooses not to trade carbon credits, it is still required to comply with the resolution’s monitoring, reporting, and verification requirements and register with the NRCC.
For other businesses emitting less than this threshold, NRCC participation is voluntary, but offers access to carbon trading and the potential to monetise emissions reductions. All registered credits will be verified by accredited third parties and recorded in the national registry to ensure transparency and prevent double-counting. Under this system, carbon credits are treated as financial instruments, which means they can be traded on platforms licensed by the UAE’s Securities and Commodities Authority.
The deadline for compliance and registration is June 28, 2025. Late or inaccurate submissions may result in fines of up to AED 1 million or even suspension of trading licenses in serious cases.
Tangible, measurable climate action
These developments are part of a much broader national agenda. The UAE has already rolled out a series of long-term strategies – the Green Agenda 2030, the Energy Strategy 2050, and the National Climate Change Plan – to lay the foundation for a low-carbon economy. The new climate laws bring these ambitions to life in tangible, measurable ways.
Importantly, this also responds to the global momentum built during COP28 and continuing through COP29, where the role of the private sector in driving climate action was made abundantly clear. By embedding emissions management and carbon trading into law, the UAE is positioning itself as a climate leader and a global hub for sustainable enterprise.
For businesses, this is not just about compliance, it’s a chance to lead, innovate, and future-proof their operations. Early adopters will be best placed to enhance their brand reputation, attract sustainable investment, and improve long-term competitiveness. The message is clear: climate action is no longer optional, but a business imperative, and a strategic advantage. Engaging proactively with the new climate law will help businesses shape the future of sustainable growth in the region.
