UAE Climate Decree No. 11: A New Era of Corporate Environmental Responsibility

As global climate policies tighten, the United Arab Emirates has taken a bold step with the introduction of Federal Decree Law No. (11) of 2024. This legislation, effective from May 30, 2025, establishes a legal and strategic framework for climate change mitigation across both public and private sectors. The law supports the UAE’s long-term ambition to achieve net-zero emissions, aligning the country with the Paris Agreement and other global sustainability goals.

This climate change UAE law applies to over 16 major sectors, extending to enterprises operating in free zones, SMEs, and multinational corporations. The law requires firms to actively manage greenhouse gas (GHG) emissions and integrate sustainability into their business practices. For UAE companies, compliance with the climate reporting mandate is no longer optional—it's foundational to operating in a resilient and future-ready economy.

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Why Was Decree No. 11 Introduced?

The primary aim of the decree is to reduce GHG emissions and manage climate risks systematically. The law outlines five national objectives that serve as the foundation for all climate-related action.

First, firms must focus on measuring and reducing GHG emissions to support the UAE’s climate neutrality targets. Second, it emphasizes strengthening the capacity of ecosystems, infrastructure, and communities to adapt to the effects of climate change. Third, it promotes investment in clean technology and R&D, empowering innovation in sustainable solutions.

Another key element is data. By encouraging the sharing of climate-related data, the decree supports better decision-making and facilitates transparency. Lastly, the law ensures that all climate actions are aligned with the UAE’s national development plans and efforts to enhance its global competitiveness.

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What Do Businesses Need to Do?

Article 4 of the decree outlines specific climate change mitigation measures that companies must implement. The law emphasizes improvements in energy efficiency, encouraging regular energy audits and upgrades to energy-saving equipment. For example, replacing outdated industrial systems with energy-efficient alternatives is one clear step toward compliance.

Transitioning to clean energy sources such as solar, wind, or hydropower is another major pillar. Companies can also enter Power Purchase Agreements (PPAs) with licensed clean energy suppliers to meet sustainability targets without building on-site infrastructure.

To support natural carbon sequestration, businesses are urged to protect carbon sinks—natural environments like mangroves, wetlands, and forests. Participating in afforestation projects is a practical way for firms to contribute.

Industrial companies, particularly in manufacturing and petrochemicals, must adopt carbon capture, use, and storage (CCUS) technologies. These solutions allow for CO₂ to be captured at the point of emission, reducing the carbon intensity of production processes such as concrete and fuel manufacturing.

Another vital aspect is the transition away from high-global-warming-potential refrigerants. Firms must switch to climate-safe coolants, like R600 or R123, and comply with updated refrigerant standards to avoid penalties.

The law also promotes carbon offsetting, urging businesses to invest in methane recovery, carbon storage, or environmental restoration projects to compensate for unavoidable emissions. Waste management is equally emphasized, and businesses are expected to explore smart composting, safe incineration, and efficient recycling systems to reduce landfill reliance.

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Reporting and Enforcement: What’s Required?

All entities falling under this law must report Scope 1 and Scope 2 emissions. For selected industries, Scope 3 emissions—indirect emissions throughout the value chain—are also mandated. This aligns with international ESG standards and positions the UAE as a leader in climate risk management.

Non-compliance is costly. Penalties range from AED 50,000 to AED 2,000,000, depending on the scale of violation and severity of environmental impact. The government has also built in incentives to encourage early adoption of climate-safe technologies and infrastructure.

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The Business Case for Early Action

Firms that take proactive steps not only avoid regulatory risk but also benefit from operational efficiency, green finance eligibility, and improved stakeholder trust. With carbon border adjustments and international supply chain scrutiny increasing, aligning with the UAE ESG compliance framework is also crucial for companies aiming to stay globally competitive.

Investors, regulators, and consumers are watching. Businesses in the UAE now have a roadmap to demonstrate leadership in climate action and support the nation’s vision for a sustainable, resilient economy.

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Final Thoughts

The implementation of Federal Decree No. 11 of 2024 is a milestone in the UAE’s journey to net-zero emissions. More than a regulatory change, it is a signal to businesses: sustainability is now a core performance metric. Organizations that adapt early, embed climate strategy, and comply with this UAE climate law will lead the transition—not just survive it.

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