In a significant move to advance its ESG agenda and achieve its carbon neutral strategy, the United Arab Emirates (UAE) introduced pivotal climate legislation in 2024. These efforts underscore the country’s determination to reach its Net Zero 2050 target, reinforcing its global leadership in sustainability. 

The first milestone is the enactment of Federal Decree-Law No. (11) of 2024 on the Reduction of Climate Change Effects, which takes effect on May 30, 2025. This law mandates the integration of climate risk assessments, emissions monitoring, and decarbonization strategies into business operations across both public and private sectors, including entities in free zones. The second is Cabinet Resolution No. (67) of 2024, establishing a National Register for Carbon Credits, which sets the foundation for regulated carbon trading aligned with Article 6 of the Paris Agreement. 

Entities emitting more than 0.5 MtCO₂e (Scope 1 and 2) must annually report emissions, reductions, and progress on mitigation plans, while others may opt-in voluntarily. The framework adopts international standards such as the GHG Protocol and ISO 14064, pushing companies to eventually incorporate Scope 3 emissions into their disclosures. 

These regulations come amid mounting climate threats, including rising sea levels projected to affect up to 90% of coastal infrastructure by 2040. The UAE’s initiatives aim to mitigate these risks while unlocking carbon market opportunities. Through verified emission reductions and access to carbon credits, businesses can finance their sustainability goals and enhance investor confidence. 

However, non-compliance carries severe penalties, including administrative fines and reputational risks. Delayed action may lead to higher operational costs, weakened competitiveness, and potential market share loss. As global expectations for transparency and climate disclosure grow, aligning with UAE’s regulatory framework is not just a compliance matter—it’s a strategic necessity for future-ready businesses committed to ESG leadership and long-term value creation. 

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https://www.ey.com/en_ae/services/climate-change-sustainability-services/how-uae-is-transforming-the-climate-landscape-through-legislative-action