Overview
Climate governance in the United Arab Emirates has gained significant momentum in recent years. As part of the nation’s journey toward its Net Zero 2050 goal, the UAE has introduced a structured framework to help the private sector manage its environmental impact.
On May 30, 2025, Federal Decree-Law No. 11 of 2024 on the Reduction of Climate Change Effects officially came into force. This law establishes a standard for businesses to measure and manage their carbon emissions, ensuring the UAE remains a competitive global hub for sustainable trade. While the law is now active, a grace period is in place until May 30, 2026, Article (15) of the law states that penalties for non-compliance range from AED 50,000 to AED 2,000,000. This guide helps break down everything you need to know to get your systems in order during this transitional year.
The Framework: Scope & Obligations
The legislation applies to all public and private sector entities operating within the UAE, including those in all free zones. Under the decree, your business can contribute to the national climate neutrality pathway by:
- Improving energy efficiency across your facilities.
- Transitioning to clean and renewable energy sources.
- Enhancing and protecting natural carbon sinks.
- Implementing carbon capture, use, and storage (CCUS) technologies.
- Using alternatives to saturated fluorocarbons.
- Participating in carbon offsetting programs.
- Implementing integrated waste management systems.
Beyond these methods, your organization is responsible for Measurement, Reporting, and Verification (MRV). This involves regularly measuring emissions and submitting reports via the Ministry of Climate Change and Environment (MOCCAE) digital platform.
The Strategic Advantage: Why Act Now?
Early adoption is a significant commercial differentiator. By implementing robust carbon management systems today, you secure your opportunity with clients and international partners who require verified supplier data. Additionally, proactive compliance improves your access to green financing. Major banks in the GCC increasingly evaluate climate performance when making lending decisions, often offering preferential interest rates for businesses with clear reduction strategies.
5 Practical Steps to Compliance
To ensure a smooth transition and take advantage of new market incentives, your business should focus on five specific implementation priorities:
1- Develop a data collection and reporting strategy
You need a reliable system to track Scope 1 (direct), Scope 2 (purchased energy), and Scope 3 (value chain) emissions. These records must be maintained for at least five years.
For many businesses in the UAE, Scope 3 represents the largest share of their total carbon footprint, accounting for more than 70 percent. These are indirect emissions embedded across your value chain and can look different depending on your sector.
- A trading company, for instance, needs to account for the emissions generated by upstream and downstream transportation, warehousing, and distribution.
- In service firms, exposure can come through business travel, purchased IT infrastructure, and the energy consumed by outsourced operations.
- A manufacturer, meanwhile, must factor in the carbon embedded in raw materials, production inputs, and the downstream use and disposal of finished products.
The GHG Protocol classifies Scope 3 emissions into 15 categories. Understanding them can help businesses prioritize the sources that matter most and devise effective reduction strategies.
2- Explore carbon reduction strategies
Analyze your current footprint to identify where you can cut emissions in line with national reduction targets. Implementing renewable energy adoption and energy efficiency programs is a practical way to align while lowering your costs.
3- Engage with regulators and industry stakeholders
Work closely with MOCCAE to get guidance on the specific reporting methodologies required for your sector. This can also provide insights into best practices that help you stay ahead of evolving standards.
4- Verify your data
Partnering with independent third-party assurance providers helps you validate your GHG data before submission, which builds trust with stakeholders and simplifies your year-end reporting process.
5- Invest in training and capacity building
Train your senior management and operational teams on the requirements of the new law and the opportunities it creates. Building internal expertise ensures that sustainability is embedded into your daily business decisions.
Building Resilience for the Future
The UAE Federal Climate Law is an opportunity to build operational resilience while differentiating your business in the local market. And a critical part of this transition is managing the environmental impact of your supply chain.
DHL Express helps businesses lower their shipment emissions through GoGreen Plus, a carbon insetting solution that replaces fossil-based jet fuel with Sustainable Aviation Fuel (SAF). Unlike traditional offsetting, insetting reduces emissions directly within DHL’s transport network, and customers receive a certificate detailing their emission reduction value alongside a complimentary Carbon Footprint Report. Meanwhile for businesses shipping across multiple divisions, the DHL GoGreen Dashboard consolidates emissions data across all transport modes in a single interactive platform, making it easier to track, report, and act on their logistics carbon footprint.
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