The UAE’s Climate Law is now in full force and here is what every business needs to know

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. The grace period until May 30, 2026, has now been reached and under Article (15) of the law states that penalties for non-compliance range from AED 50,000 to AED 2,000,000.  

The UAE has long positioned itself as a forward-thinking nation committed to sustainable development. But with the coming into force of Federal Decree-Law No. 11 of 2024 on the Reduction of Climate Change Effects, that commitment has moved decisively from aspiration to legal obligation. This legislation makes the UAE the first country in the Middle East to establish a binding legal framework for climate action. For businesses operating across the Emirates, the message is clear: climate accountability is no longer optional.  

Why Was This Law Introduced? 

To understand the significance of this legislation, it is important to understand the global and national context in which it sits. 

The UAE is a signatory to the Paris Agreement , the landmark international treaty adopted in 2015 that commits nations to limiting global warming and reducing greenhouse gas (GHG) emissions. As part of this commitment, each country submits Nationally Determined Contributions (NDCs) binding pledges outlining how they will reduce emissions.The most recent version (NDC 3.0) commits the UAE to cutting greenhouse gas (GHG) emissions by 47% by 2035 (compared to 2019 levels) and reiterates its broader goal to reach Net Zero emissions by 2050, with the law designed to mandate emissions measurement, monitoring, reporting and reduction in line with this target.  

At the national level, the law formally embeds the UAE’s Net Zero 2050 goal into legislation and sets a binding framework for greenhouse gas emissions management, representing a move from voluntary sustainability initiatives to enforceable climate action obligations. The timing is equally significant. Having hosted COP28 in Dubai in 2023, the UAE placed itself at the centre of the global climate conversation. This legislation is the domestic legislative follow-through to those international commitments, translating pledges made on the world stage into enforceable rules at home. 

What the Law Requires 

All entities in the UAE, regardless of their size or sector, must measure and disclose their ​​GHG emissions under the Climate Change Law. This requirement also extends to entities operating within free zones, ensuring comprehensive nationwide coverage. In addition to reporting their current GHG emissions, entities are required to submit details of both existing and planned GHG emissions reduction measures, demonstrating their commitment to sustainability. To guide this transition, the Ministry of Climate Change and Environment (MOCCAE) will establish annual GHG emissions reduction targets, which entities must incorporate into their strategies to ensure compliance with and contribute to the UAE’s broader net-zero goals. 

This represents a complete shift from voluntary sustainability reporting to a legal obligation for every business operating in the UAE, including those in free zones.  

The UAE government will provide support for innovation, new technologies, and carbon offsetting initiatives, along with the development of GHG emissions trading markets. Entities should engage with sustainability experts and government to understand what opportunities are available in this respect. 

Specifically, all entities must: 

• Measure and track their greenhouse gas emissions (Scope 1, 2, and 3) 

• Report emissions data through approved methodologies and the government’s digital platform 

• Develop decarbonisation strategies and climate adaptation plans 

• Maintain five years of records for transparency and accountability 

• Submit to third-party verification by accredited auditors. 

The Cost of Non-Compliance 

This is where businesses must pay close attention. Non-compliance is not merely a reputational risk, it carries direct and significant financial consequences. 

Fines ranging from AED 50,000 to AED 2 million will be imposed for non-compliance, with repeated violations leading to higher penalties. For repeat violations within two years, fines double, reaching up to AED 4,000,000.  

Beyond financial penalties, in cases of severe or continued non-compliance, administrative measures may be imposed, including restrictions on business operations, the suspension of licences, and even the requirement to carry out corrective environmental measures.  

The consequences extend further still. Regulatory violations can affect business licence status, government contract eligibility, and access to certain sectors of the UAE economy. Companies without compliant carbon accounting systems may also face contract losses as clients seek partners who can provide transparent sustainability metrics.  

What You Should Do Now 

The full compliance deadline of 30 May 2026 has passed. If your organisation has not yet acted, the time is now. We recommend the following steps: 

1. Review the law to familiarise yourself with the full provisions of Federal Decree-Law No. 11 of 2024.  Federal Decree-Law No. 11  

1. Conduct a compliance audit and assess where your organisation currently stands against the law’s requirements. 

1. Establish GHG measurement systems and implement data collection and emissions tracking processes using approved standards. 

1. Develop a decarbonisation plan set out your organisation’s strategy for reducing emissions in line with national targets. 

1. Engage your legal and sustainability advisors and if necessary, seek specialist support if your organisation requires guidance on meeting its obligations. 

1. Stay updated: The Ministry of Climate Change and Environment continues to issue executive resolutions; ensure your teams are monitoring developments. 

A Competitive Opportunity, Not Just a Compliance Burden 

While the compliance requirements are demanding, they also present a real opportunity. Businesses that align with the law will not only avoid penalties but will also gain a competitive edge as sustainability credentials become an increasingly defining factor in commercial relationships, investor decisions, and government procurement.  

The UAE’s climate law is not an isolated development, it sits within a broader global shift towards mandatory climate disclosure and carbon accountability. Businesses that act now will be better positioned for the regulatory landscape that lies ahead, not just in the UAE, but internationally. 

CEBC Editorial Team