TRW & Co · Energy and projects
UAE Climate Change Law: Emissions Reporting Obligations and Board Oversight
The UAE climate change law, Federal Decree-Law No. 11 of 2024, has been in force since 30 May 2025 and its one-year transitional period ended on 30 May 2026. It requires businesses that emit greenhouse gases, including free zone companies, to measure, record, report and reduce emissions. This guide explains the duties, deadlines, fines and board actions.
Key pointThere is no size threshold in the decree-law itself, and the 0.5 million tonne threshold people quote belongs to the separate carbon credit register, so most operating companies should assume they are in scope.
At a glance
In force since May 2025
Federal Decree-Law No. 11 of 2024 entered into force on 30 May 2025, with a one-year transitional period that ended on 30 May 2026.
Free zones included
The law applies to public and private legal persons and individual enterprises that emit greenhouse gases, on the mainland and in free zones.
Measure, report, reduce
Sources must measure emissions to approved standards, keep records, report to MoCCAE or emirate authorities and contribute to reduction targets.
Significant fines
Published analyses describe administrative fines from AED 50,000 to AED 2,000,000 for breaches, with heavier consequences for repeat violations.
Abu Dhabi goes further
The Environment Agency Abu Dhabi requires large emitting facilities to report annually with third-party verification, with first reports due in 2026.
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The short answer: what the UAE climate change law requires
The UAE climate change law, Federal Decree-Law No. 11 of 2024 on the Reduction of Climate Change Effects, makes measuring, reporting and reducing greenhouse gas emissions a legal duty for businesses. It came into force on 30 May 2025 and gave covered entities a one-year transitional period, which ended on 30 May 2026, to bring their operations into line. As of October 2026, the core duties are therefore live.
The law applies to public and private legal persons and individual enterprises whose activities release greenhouse gases, which the law calls sources. It applies on the mainland and in free zones. There is no general size threshold in the decree-law itself; the Ministry of Climate Change and Environment (MoCCAE) and emirate-level competent authorities determine which sources must report, how and when.
Non-compliance carries administrative fines that published analyses consistently describe as ranging from AED 50,000 to AED 2,000,000, with heavier consequences for repeat violations. For boards, the more important point is that emissions data has become regulated information that needs owners, controls and audit trails.
What changed and when: the UAE climate change law timeline
The decree-law was issued in 2024 as part of the UAE's net zero by 2050 pathway. Before it, emissions reporting was largely voluntary outside specific sectors and listed company disclosure rules. The key dates are:
| Date | Development | Who it affects |
|---|---|---|
| 2024 | Cabinet Resolution No. 67 of 2024 on the National Register for Carbon Credits issued | High emitters and carbon credit participants |
| 28 December 2024 | Carbon credit register resolution takes effect, according to published analyses | Entities emitting 0.5 million tonnes CO2e or more a year, voluntary participants and trading platforms |
| 30 May 2025 | Federal Decree-Law No. 11 of 2024 enters into force | All sources of greenhouse gas emissions, mainland and free zones |
| 30 May 2026 | One-year transitional period ends | Covered entities must have aligned operations with the law and its implementing rules |
| 2026 onwards | Abu Dhabi's mandatory MRV programme: first reports from large emitting facilities due in 2026 | Large emitting facilities in Abu Dhabi |
Implementation is still being built out. MoCCAE has launched a national measurement, reporting and verification (MRV) system, and implementing decisions on reporting scopes, methods and designated sources are being issued in stages. Check the current position with MoCCAE and the competent authority in each emirate where you operate before finalising your approach.
Core duties under the UAE climate change law
Measure and record
Covered sources must measure their greenhouse gas emissions using approved standards and maintain records. Published guidance from the major advisory firms indicates that records must be kept for at least five years and made available to the authorities. In practice, most companies build their inventory on the GHG Protocol or ISO 14064, starting with direct (Scope 1) and purchased energy (Scope 2) emissions, while keeping value chain data in view.
Report
Sources must submit emissions data and related reports to MoCCAE or the competent emirate authority, in the form and at the intervals set by implementing rules, through electronic systems. Abu Dhabi's Environment Agency MRV programme already requires large emitting facilities to monitor, report and have their emissions verified by third parties annually, with first reports due in 2026.
Reduce
The law expects sources to contribute to national reduction targets through measures such as energy efficiency, clean energy, carbon capture and protection of carbon sinks. National and sectoral targets are set by the authorities rather than in the decree-law. Expect reduction duties to become more specific over time.
Adapt
The law also addresses adaptation: assessing climate risks to operations and communities and preparing to manage them. For asset-heavy businesses, this links directly to insurance, maintenance planning and the design of new facilities.
The official text of the decree-law is on the UAE Legislation portal; the Arabic text prevails over translations.
How the UAE climate change law affects different sectors
The duties are the same in law for every source, but the practical burden varies widely. The table below summarises where the main pressure points usually sit.
| Sector | Main emission sources | Practical focus |
|---|---|---|
| Energy, oil and gas, heavy industry | Combustion, process emissions, flaring | Facility-level MRV, likely designation, verification readiness and carbon credit register status |
| Real estate and hospitality | Purchased electricity and cooling, backup generators | Utility data across portfolios, tenant data sharing clauses, efficiency upgrades |
| Logistics and transport | Vehicle and vessel fuel | Fuel card and telematics data, fleet transition plans |
| Construction | Site plant, generators, materials | Contractual data duties for subcontractors, site-level records |
| Services and offices | Purchased electricity | Simple Scope 2 inventory, landlord data, documented methodology |
Even low-emitting service businesses should not ignore the UAE climate change law. Their inventory may be simple, but customers, lenders and parent companies increasingly ask for the same data, and having it ready costs little.
Contracts, leases and supply chains
Much of the data a company needs sits with someone else: the landlord who controls the building meters, the logistics provider running the fleet, or the contractor operating generators on site. Contracts signed before the law rarely oblige these parties to share emissions data. New and renewed contracts should include clear duties to provide energy and fuel data in a usable format, at set intervals, with audit rights.
Leases deserve particular attention. Commercial tenants often pay for cooling and power through service charges that do not show consumption separately. Agree metering and data-sharing terms when leases are renewed. For long-term contracts governed by UAE law and concluded from 1 June 2026, the new Civil Transactions Law applies, so allocation of the cost of new compliance duties should be addressed expressly rather than left to general rules. Our guide to UAE contract law explains the basics.
Board oversight and transition planning
The UAE climate change law does not create a separate liability regime for directors, but it changes what reasonable board oversight looks like. Directors' general duties under the Commercial Companies Law, and the governance codes for listed and regulated firms, require them to manage material risks. A legal duty to report emissions, backed by fines, makes climate risk a compliance matter as well as a strategic one.
Good practice for boards includes:
- Assigning executive ownership for emissions data and reporting, with a named accountable officer.
- Bringing emissions controls into internal audit scope, as with financial controls.
- Approving a transition plan that links reduction measures, capital expenditure and the company's public statements.
- Receiving regular reports on regulatory developments from MoCCAE and emirate authorities.
- Making sure sustainability claims in marketing and investor materials match the data.
Listed companies and financial services firms face additional disclosure rules from their regulators, and statements made in those disclosures carry their own liability. Our guides to directors' duties and personal liability and ESG disclosures and greenwashing risk cover these overlaps.
The transitional period has ended, but the hardest part of compliance is data, not filing. A company that has twelve months of reliable facility-level energy and fuel data, a written methodology and a clear owner is ready for whatever reporting format the authorities settle on. A company that has none of these is behind, whatever the filing deadline turns out to be.
How to comply: a step-by-step approach
- Confirm scope and designation. Assume you are a source if your operations emit greenhouse gases. Check with MoCCAE and the competent authority in each emirate whether you have been designated to report and on what timetable.
- Map your emissions boundary. List facilities, vehicles, generators and purchased energy across all UAE entities, including free zone companies.
- Choose and document a methodology. Use a recognised standard such as the GHG Protocol or ISO 14064 and record your assumptions so a verifier can follow them.
- Build the data trail. Collect meter readings, fuel invoices and production logs, and keep them for at least the required retention period.
- Register on the reporting systems. Set up access to the national MRV system and any emirate platform well before you need to file.
- Prepare for verification. Even where verification is not yet required, design your data so an independent verifier could audit it.
- Adopt a reduction and adaptation plan. Link measures to budgets and board approval, and keep evidence of progress.
An illustrative scenario
This scenario is illustrative only. It does not describe a real client or situation.
A regional logistics group has a warehouse network in a Dubai free zone, a vehicle fleet operating across the emirates, and a manufacturing site in Abu Dhabi. Its management assumed the UAE climate change law applied only to heavy industry and that the free zone companies were outside it.
A legal review shows otherwise. All three operations are sources, and the free zone status makes no difference. The Abu Dhabi site may also fall within the emirate's MRV programme for large facilities, depending on its emissions. The group appoints a head of sustainability reporting, builds a combined inventory using fuel cards, utility bills and production data, and registers on the national system. Its board approves a fleet transition plan and asks internal audit to test the data. When implementing guidance lands, the group adapts its format rather than starting from scratch.
The cost of the exercise was modest because the group started with data it already held for fuel and utility payments. The main work was governance: agreeing who owns each data source, how often it is checked and how the figures feed the board's transition plan.
Risks and common mistakes
Assuming free zone companies are exempt
Free zone entities are used to their own regulatory perimeter, but the climate law is federal and expressly reaches free zones. A free zone licence does not remove the duty to measure, keep records and report if designated. Groups with mixed mainland and free zone structures should treat their UAE operations as one inventory, then allocate reporting by entity as the authorities require.
Waiting for guidance before collecting data
Uncertainty about reporting formats and deadlines has led some companies to do nothing. That is risky. The duty to measure and keep records has applied since the law came into force, and historical data is hard to reconstruct later. Start collecting facility-level data now using a recognised standard; the format can be adjusted when guidance is final.
Confusing the climate law with the carbon credit register
Cabinet Resolution No. 67 of 2024 on the National Register for Carbon Credits applies mandatory registration to entities emitting 0.5 million tonnes of CO2e or more a year, and sets rules for carbon credit trading. The climate law's reporting duty is broader and has no such threshold. Falling below the register threshold does not take a company outside the climate law. See our guide to carbon credits in the UAE.
Leaving responsibility unassigned
Emissions data often falls between finance, operations, facilities and sustainability teams, with no one accountable for accuracy. When a regulator, verifier or lender asks how a figure was calculated, nobody can answer. Name an accountable officer, document who supplies each data stream and set review steps, in the same way you would for financial reporting. Clear ownership is also the best evidence that the board has taken its oversight role under the UAE climate change law seriously.
Making claims the data cannot support
Public statements about being carbon neutral or on track for net zero attract scrutiny once emissions are regulated. If reported figures and marketing claims diverge, a company risks regulatory action, consumer protection complaints and reputational damage. Align communications with reported data and keep evidence for every claim, including details of any carbon credits used.
The cross-border angle
Many UAE groups also report under foreign regimes. Companies with European operations or customers may face EU sustainability reporting rules and the EU carbon border adjustment mechanism for certain imported goods. UK-linked groups may be subject to UK climate disclosure requirements. Building one dataset that serves all regimes saves cost and avoids inconsistent figures.
Within the UAE, the financial free zones add their own layer. Firms regulated in DIFC or ADGM may face sustainability and climate risk expectations from the DFSA or the FSRA, and listed companies have disclosure duties set by their market regulator. These sit alongside, not instead of, the federal UAE climate change law, so a DIFC or ADGM entity that emits greenhouse gases should check both sets of rules.
Exporters to Europe in sectors such as aluminium, steel and fertilisers should expect their buyers to ask for verified emissions data. Suppliers in Bangladesh, India and China that feed UAE groups' value chains will increasingly be asked for emissions information too, so contractual data obligations should be built into supply agreements.
What to do next: a checklist
- Confirm that each UAE entity, including free zone companies, is treated as a potential source.
- Check designation and reporting timetables with MoCCAE and each relevant emirate authority.
- Build a Scope 1 and Scope 2 inventory with a documented methodology and five-year record retention.
- Register on the national MRV system and any emirate platform.
- Put emissions data under board oversight and internal audit.
- Check whether you are within the carbon credit register threshold.
- Review public sustainability claims against your data.
TRW & Co advises boards and compliance teams on UAE climate change law duties, governance and contracts, working with technical and verification specialists where needed. Explore our corporate governance practice and renewable energy practice, or contact us at info@trw.co or +971 58 942 1012.
Frequently asked questions
01Who does the UAE climate change law apply to?
It applies to sources, meaning public and private legal persons and individual enterprises whose activities release greenhouse gases into the atmosphere. That includes companies in free zones. The decree-law does not set a general size threshold; MoCCAE and emirate-level competent authorities determine which sources must report and on what timetable. Most operating businesses should assume they are covered and check their designation status with the authorities.
02When did the UAE climate law take effect?
Federal Decree-Law No. 11 of 2024 on the Reduction of Climate Change Effects entered into force on 30 May 2025. It gave covered entities a one-year transitional period to align with its requirements, which ended on 30 May 2026. Implementing rules on reporting formats, scopes and designated sources are being issued in stages, so companies should monitor MoCCAE and emirate authority announcements.
03What are the penalties under the UAE climate change law?
Published analyses by major advisory firms describe administrative fines ranging from AED 50,000 to AED 2,000,000 for breaches of the measurement, reporting and record-keeping duties, with heavier penalties for repeat violations. Additional administrative measures, such as corrective directions, may also apply. Reputational and commercial consequences, including questions from lenders and customers, can outweigh the fine.
04Do free zone companies have to report emissions?
Yes. The climate law is federal and applies expressly to sources in free zones. A free zone licence does not exempt a company from measuring emissions, keeping records and reporting when designated. Groups with mainland and free zone entities should build one inventory covering all UAE operations and then allocate reporting by entity.
05Which emissions must be reported: Scope 1, 2 or 3?
The decree-law leaves detailed scopes and methods to implementing rules. Most advisers treat direct emissions (Scope 1) and purchased energy emissions (Scope 2) as the minimum, and the carbon credit register rules require Scope 1 and 2 reporting for entities within their scope. Value chain (Scope 3) data is worth collecting where practical, since requirements may expand and customers increasingly ask for it.
06How long must emissions records be kept?
Published guidance on the law indicates that emissions data must be retained for at least five years and made available to the competent authorities on request. Companies should keep the underlying evidence, such as fuel invoices, utility bills and meter readings, as well as the calculations, so that a regulator or independent verifier can trace each reported figure back to its source.
Sources and official materials
- Federal Decree-Law No. 11 of 2024 on the Reduction of Climate Change Effects — Official legislation record
- Cabinet Resolution No. 67 of 2024 on the National Register for Carbon Credits — Mandatory registration for high emitters and carbon credit trading rules
- Environment Agency Abu Dhabi MRV programme — Annual verified reporting for large emitting facilities, first reports in 2026
- UAE Energy Strategy 2050 — National clean energy and net zero targets
- Ministry of Climate Change and Environment — Federal regulator for climate law implementation
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.
