Below is an excerpt from ISS-Corporate’s recently released article “Navigating the UAE’s New Climate Change Law: Implications for Local Businesses”. The full article is available on ISS-Corporate’s resources page.
The UAE has enacted Federal Decree-Law No. (11) of 2024 on the Reduction of the Effects of Climate Change – a significant development under which all public and private sector entities, including those in Free Zones, are now legally obligated to address climate considerations.
This legislation, which went into effect on May 30, 2025, aims to manage emissions within the UAE to ensure effective contribution to international efforts for mitigating climate change and achieving climate neutrality. Furthermore, it seeks to strengthen the capacity of various sectors and society as a whole to adapt to the impacts of climate change, while also supporting innovation, data sharing, and aligning climate action with sustainable development and economic diversification plans.
Read on for key takeaways from the new law – including what it mandates and the implications and opportunities, both pragmatic and strategic, for local businesses now having to comply.
Key Elements of the Law
The legislation introduces new climate-related requirements for all public and private sector entities, including those in Free Zones:
- Measurement, Reporting, and Verification: Businesses must now regularly measure emissions, compile inventories, and submit reports using standards set by the Ministry of Climate Change and Environment (MOCCAE).
- Emissions Reduction Commitments: The Cabinet will set annual emissions reduction targets for sectors such as energy, infrastructure, and waste management. These are reviewed periodically to ensure alignment with the UAE’s climate neutrality pathway.
- Risk Assessments: Sector-specific adaptation plans, covering climate risk assessments, response measures, identification of early warning systems, and implementation plans, will be rolled out by the competent authority in coordination with MOCCAE.
- National Register for Carbon Credits: Following Cabinet Resolution No. (67) of 2024, MOCCAE will establish a National Register for Carbon Credits, which will facilitate carbon offsetting and trading. Entities emitting 0.5 million metric tons or more of CO2 equivalent annually (Scope 1 and 2) must register, while others can participate voluntarily.
MOCCAE will oversee implementation, supported by local authorities and sector regulators.
By:
Ilaria Vigo, Associate Vice President, Sustainable Finance, ISS-Corporate
