TRW & Co · Energy and projects
Carbon Credits and Carbon Markets in the UAE: Registers, Trading and Contracts
Carbon credits UAE rules combine a federal National Register for Carbon Credits, mandatory for entities emitting 0.5 million tonnes CO2e or more a year, with regulated trading in ADGM. There is no cap-and-trade scheme, so most credits are bought voluntarily under contract. This guide explains the register, trading routes, credit types and the contract terms buyers need.
Key pointThe 0.5 million tonne threshold applies only to the carbon credit register; the broader climate change law has no such threshold, so falling below it does not remove a company's emissions reporting duties.
At a glance
National carbon register
Cabinet Resolution No. 67 of 2024 created a MoCCAE register requiring entities emitting 0.5 million tonnes CO2e or more yearly to register and report.
Disposal statements required
Registered entities selling or transferring credits must file statements showing the quantity, the recipient and the price of each disposal.
Approved platforms only
Credits on the national register may be traded domestically or internationally through platforms that have the ministry's prior approval.
ADGM regulated trading
Since 2022, ADGM has classified carbon credits as environmental instruments, allowing licensed exchanges and clearing houses to offer regulated spot trading.
No cap-and-trade
The UAE has no general emissions trading obligation, so most corporate purchases are voluntary and protection depends heavily on the purchase contract.
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The short answer: how carbon credits UAE rules work
Carbon credits UAE regulation now has two layers. Federally, Cabinet Resolution No. 67 of 2024 created the National Register for Carbon Credits, which requires high-emitting entities to register, report verified emissions and record every credit they sell or transfer, and which allows credits to be traded through approved platforms. In Abu Dhabi Global Market (ADGM), carbon credits can be traded as regulated environmental instruments on a licensed exchange and clearing house.
The UAE does not operate a cap-and-trade system like the EU Emissions Trading System. There is no general legal obligation to buy credits. Instead, the register creates transparency and a regulated route for trading, while the federal climate change law requires most businesses to measure, report and reduce emissions and lists offsetting among the tools available.
For buyers, the legal questions are practical: is the credit genuine, is it registered and retired properly, can it support the claim you want to make, and what happens if it is later invalidated. Those questions are answered mainly in the purchase contract.
The legal framework for carbon credits UAE participants
The National Register for Carbon Credits
Cabinet Resolution No. 67 of 2024 established the National Register for Carbon Credits under the Ministry of Climate Change and Environment (MoCCAE). Published analyses report that it took effect on 28 December 2024. It applies to public and private entities, onshore and in free zones, and covers three groups:
- Entities with substantial emissions, meaning those emitting 0.5 million tonnes of CO2 equivalent or more a year, which must register.
- Participating entities below that threshold, which may register voluntarily to take part in carbon credit activities.
- Trading platforms that facilitate the exchange of carbon credits.
Registered entities must operate a monitoring, reporting and verification system, submit annual emissions reports to MoCCAE covering the main greenhouse gases, and have them verified by approved verifiers. When they sell or transfer credits, they must file a disposal statement showing the quantity, the recipient and the price. The resolution also provides for administrative penalties and, in serious cases, suspension or cancellation of registration.
Trading platforms
Under the resolution, credits recorded on the register can be traded domestically or internationally through platforms that have the ministry's prior approval, with the federal securities and commodities regulator overseeing licensed platforms. Detailed approval criteria for platforms have been slow to emerge, so participants should confirm a platform's status before relying on it.
ADGM and environmental instruments
ADGM's Financial Services Regulatory Authority introduced an environmental instruments classification in 2022, allowing spot and derivative trading of carbon credits under a capital markets framework. The first exchange and clearing house licensed under it began operating in ADGM in late 2022. Firms that arrange, deal in or advise on carbon credits in or from ADGM need to consider whether that activity is regulated; see our guide to ADGM financial regulation.
The climate change law
Federal Decree-Law No. 11 of 2024, in force since 30 May 2025, requires sources of emissions to measure, report and reduce them, and its one-year transitional period ended on 30 May 2026. It is broader than the register: it has no 0.5 million tonne threshold. Our guide to the UAE climate change law explains the duties.
Compliance, voluntary and Article 6 credits compared
"Carbon credit" covers several different products. The legal value of each depends on the standard behind it, the registry it sits on and the claim it can support.
| Type | What it is | Typical use | Key legal check |
|---|---|---|---|
| Voluntary market credits | Credits issued by independent standards for projects that reduce or remove emissions | Corporate offsetting and net zero claims | Standard, methodology, vintage, registry serial numbers and retirement |
| Credits recorded on the UAE national register | Credits registered with MoCCAE under Cabinet Resolution No. 67 of 2024 | Domestic trading and reporting by registered entities | Registration status, disposal statements, approved platform |
| Article 6 credits | Credits authorised by host countries for international transfer under the Paris Agreement | Government-to-government deals and some compliance schemes | Host country authorisation and corresponding adjustment |
| Energy attribute certificates | Certificates such as Abu Dhabi's Clean Energy Certificates, which certify clean electricity, not emission reductions | Scope 2 claims | Not interchangeable with carbon credits |
Quality also varies within each category. Credits differ in how robust their baselines are, how permanent the reductions or removals will be, and how independent the verification was. Removal credits, such as those from carbon capture or reforestation, are often priced and treated differently from avoidance credits, such as those from renewable energy that displaces fossil generation. Buyers making public claims increasingly favour recent vintages, recognised quality labels and transparent project data. For carbon credits UAE buyers intend to use in disclosures, keep a short written rationale for why each batch was chosen.
Confusing these products is a common source of problems. A renewable electricity certificate is not an offset, and a voluntary credit without host country authorisation may not count towards another country's targets. Match the product to the claim before you buy.
Contracting for carbon credits: what the agreement must cover
Most carbon credits UAE companies buy are acquired under bilateral agreements, either spot purchases of issued credits or forward contracts, often called emission reduction purchase agreements, for credits a project has not yet generated. The contract carries most of the legal protection.
- Description of the credits. Standard, methodology, project, host country, vintage and any labels or authorisations required.
- Delivery mechanics. Transfer to the buyer's registry account or retirement on the buyer's behalf, with serial numbers and evidence.
- Delivery risk. For forward contracts, what happens if the project under-delivers: make-good with replacement credits, price reduction or termination.
- Title and warranties. Good title, no double counting or double claiming, and that the credits have not been retired or encumbered.
- Invalidation. Remedies if credits are later cancelled or found ineligible, including replacement and indemnities.
- Regulatory change. Allocation of risk if UAE or host country rules change, including Article 6 authorisation being withdrawn.
- UAE reporting. Cooperation on disposal statements and any information the register requires.
- Governing law and disputes. A clear choice of law and arbitration seat suited to cross-border counterparties.
Ask for retirement in your name, with the retirement certificate and serial numbers, rather than a transfer you will retire later. It closes the gap in which credits could be resold or lost, and gives you the evidence a regulator, auditor or consumer protection authority would expect to see behind any offsetting claim.
Generating and selling carbon credits from UAE projects
The UAE is not only a market for buyers. Renewable energy, energy efficiency, carbon capture, mangrove and waste projects can in principle generate credits, and UAE-based investors fund projects across Africa and Asia that do. Sellers face a different set of legal questions from buyers.
Eligibility and ownership
The first question is who owns the emission reductions. In a project with a government offtaker, a landowner, an EPC contractor and lenders, the right to credits should be allocated expressly in the project documents. Power purchase agreements and concession contracts may already assign environmental attributes to the buyer or the government. Check before registering a project, because a credit claimed by two parties will fail diligence. Our guide to power purchase agreements in the UAE explains how attributes are usually treated.
Additionality and overlap with other schemes
Independent standards generally require that a project would not have happened without carbon finance. Projects already mandated by law, or supported by a long-term contract that makes them viable, may struggle to show this. Sellers should also avoid issuing carbon credits and energy attribute certificates for the same underlying output, which risks double claiming.
Register obligations for sellers
Entities registered on the national register must report disposals of credits, including the price and the recipient. Sellers that fall within the register, whether because of their emissions or by voluntary registration, should build those reporting duties into their sales process and contracts. Detailed requirements appear in the climate change decree-law and its implementing resolutions, so carbon credits UAE sellers should keep their compliance calendar under review as further rules are issued.
Buying and using carbon credits: step by step
- Measure first. Build an emissions inventory under the climate law before deciding how many credits you need. Credits should address residual emissions, not replace reduction.
- Check register obligations. Confirm whether your emissions reach the national register threshold, or whether voluntary registration makes sense.
- Define the claim. Decide what you will say publicly, such as offsetting a defined part of your footprint, and which credits can support it.
- Diligence the supply. Review the project documents, standard, verification reports, registry records and the seller's title. For Article 6 credits, confirm authorisation.
- Choose the route. Buy bilaterally, through an approved platform or on a regulated exchange such as ADGM's, depending on product and volume.
- Contract and close. Sign an agreement covering the points above and obtain retirement evidence.
- Record and report. File any disposal statements, keep records and align disclosures with the credits actually retired.
An illustrative scenario
This scenario is illustrative only. It does not describe a real client or transaction.
A UAE hospitality group wants to market a carbon neutral events package. It measures the emissions of each event, reduces what it can through efficient cooling and clean electricity certificates, and plans to offset the rest.
Its procurement team finds a low-priced supply of forestry credits. Legal diligence shows that some of the credits are from an older vintage under a methodology that has since been revised, and the seller cannot show a clear chain of title. The group instead signs a spot agreement for credits from a project with recent verification, with retirement in its name, a warranty against double counting and a replacement obligation if any credits are invalidated.
Its marketing team is told to describe exactly what was offset and how, and to publish the retirement details. The claim is narrower than originally planned, but it can be defended.
Risks and common mistakes
Overstating what credits achieve
Claims such as "carbon neutral" or "net zero" based mainly on credits attract scrutiny from consumers, regulators and investors. If the claim does not match the credits retired or the emissions measured, the company may face consumer protection complaints and reputational harm. Describe the scope, the credits used and the reductions made. Our guide to greenwashing risk in the UAE covers this in detail.
Buying without checking title and retirement
Carbon credits are records on registries, and their value depends on those records being accurate. Credits that have already been retired, are subject to competing claims or sit in an account the seller does not control are worthless to the buyer. Check serial numbers against the registry, confirm the seller's account and insist on retirement evidence in your name.
Ignoring regulatory status when trading
Trading or arranging deals in carbon credits can be a regulated activity, particularly in ADGM where they are treated as environmental instruments, and the federal register requires trading through approved platforms. Brokers and traders operating without the right permissions risk enforcement. Firms building a carbon trading business should confirm licensing in each jurisdiction before launch.
Leaving tax treatment unresolved
The corporate tax and VAT treatment of carbon credit purchases, sales and retirements is not fully settled in published guidance. Revenue from credit sales may be taxable, and whether purchases are deductible depends on the facts. Take tax advice from a registered tax agent before entering large or recurring transactions; our corporate tax explainer covers the general rules.
The cross-border angle
Most credits bought in the UAE come from projects abroad, in Asia, Africa and Latin America, so host country rules matter. Some countries restrict exports of credits or require authorisation and a share of proceeds. Under Article 6 of the Paris Agreement, credits used towards another country's climate targets need host country authorisation and a corresponding adjustment, and buyers should confirm both.
UAE groups with European or UK operations should check how those jurisdictions treat offsets in sustainability disclosures, which may be more restrictive than voluntary practice. Developers in Bangladesh, India and other South Asian markets selling credits to UAE buyers should expect detailed diligence and should keep project documents, verification reports and registry records ready. Carbon credits UAE buyers increasingly ask for warranties backed by insurance or replacement obligations.
What to do next: a checklist
- Check whether your annual emissions reach the national register threshold of 0.5 million tonnes CO2e.
- Build your climate law inventory before setting an offsetting strategy.
- Define the claim you want to make and choose credits that can support it.
- Diligence project, standard, vintage, title and registry records.
- Use a purchase agreement with retirement, warranties, replacement and dispute provisions.
- Confirm licensing if you trade, broker or advise on carbon credits UAE transactions.
- Align public statements with retired credits and keep the evidence.
TRW & Co advises buyers, sellers and project developers on carbon credits UAE regulation and contracting, working with tax agents and technical specialists where needed. Explore our renewable energy practice, or contact us at info@trw.co or +971 58 942 1012.
Frequently asked questions
01Does the UAE have a carbon trading scheme?
Not a cap-and-trade scheme like the EU ETS. The UAE has a National Register for Carbon Credits under Cabinet Resolution No. 67 of 2024, which requires high emitters to register and report and allows credits to be traded through approved platforms. ADGM also regulates carbon credits as environmental instruments, with a licensed exchange and clearing house. Buying credits is otherwise voluntary.
02Who must register with the National Register for Carbon Credits?
Public and private entities with annual emissions of 0.5 million tonnes of CO2 equivalent or more must register. Entities below that threshold may register voluntarily to participate in carbon credit activities, and trading platforms are also covered. Registered entities must run monitoring, reporting and verification systems and submit annual reports to the Ministry of Climate Change and Environment.
03Can a UAE company use carbon credits to meet the climate change law?
The climate change law expects sources to reduce emissions and lists offsetting among the available measures, but it does not let credits replace the duty to measure and report. Credits should address residual emissions after reduction efforts. How credits will be recognised against any sectoral reduction targets depends on implementing rules, so companies should check the current guidance before relying on them.
04Is trading carbon credits a regulated activity in the UAE?
It can be. In ADGM, carbon credits are environmental instruments, so dealing, arranging or operating a market in them can require FSRA authorisation. At federal level, the register resolution requires trading through ministry-approved platforms, with the securities and commodities regulator overseeing licensed platforms. Anyone building a brokerage or trading business should confirm licensing before starting.
05What should a carbon credit purchase agreement include?
It should describe the credits precisely, including standard, project, vintage and any authorisation; set delivery or retirement mechanics with serial numbers; allocate delivery risk for forward credits; give warranties on title and no double counting; provide remedies if credits are invalidated; address regulatory change; require cooperation on UAE register filings; and choose governing law and dispute resolution suited to cross-border counterparties.
06How are carbon credits taxed in the UAE?
Published guidance does not yet fully settle the corporate tax and VAT treatment of carbon credit transactions. Income from selling credits may be taxable, and whether purchases are deductible depends on the business purpose and facts. Companies entering significant or recurring transactions should take advice from a registered tax agent and keep records supporting the treatment adopted.
Sources and official materials
- Cabinet Resolution No. 67 of 2024 on the National Register for Carbon Credits — Registration, MRV, disposal statements and trading platforms
- Federal Decree-Law No. 11 of 2024 on the Reduction of Climate Change Effects — Federal duties to measure, report and reduce emissions
- Abu Dhabi Global Market — Financial centre regulating carbon credits as environmental instruments
- Ministry of Climate Change and Environment — Operator of the national register and MRV system
- Abu Dhabi DoE Regulatory Policy for Clean Energy Certificates — Energy attribute certificates, distinct from carbon credits
General information only, current as at 27 October 2026. It is not legal advice and does not create a lawyer–client relationship. UAE law differs between the onshore jurisdiction, the DIFC, ADGM and the free zones, and changes frequently; check current official sources and take advice on the facts of your matter.
