Federal Decree-Law No. (11) of 2024 establishes new emissions reporting obligations for businesses operating in the UAE, including free zones
Federal Decree-Law No. (11) of 2024 entered into force in May 2025 (nine months after its August 28, 2024 publication). Businesses have until May 2026 to adjust their status, with specific reporting deadlines to be determined by Ministry resolution.
On August 28, 2024, the UAE enacted Federal Decree-Law No. (11) of 2024 On the Reduction of Climate Change Effects. This landmark legislation moves the country from voluntary climate action to mandatory emissions management and reporting.
The law applies to all "sources" in the State, including free zones (Article 3). A "source" is defined as any public or private legal person, or individual enterprise, whose operations release greenhouse gases into the atmosphere.
Article 6 mandates that designated sources must measure emissions regularly, prepare an emissions inventory, submit periodic reports according to Ministry standards, and maintain records for five years from the date of each analysis.
Crucially, the Ministry of Climate Change and Environment (MOCCAE), in coordination with local competent authorities, will determine which specific sources are subject to mandatory reporting through subsequent resolutions. This means while the framework is law, specific industry thresholds and deadlines will be announced through implementing regulations.
Article 6 establishes specific obligations for sources designated by the Ministry:
Measure emissions from activities on a regular basis using standards specified by the Ministry or competent authority. This includes all greenhouse gases defined in the law: CO2, methane, nitrous oxide, and fluorinated gases.
Prepare and maintain a comprehensive emissions inventory. The Ministry will establish an electronic system for submission mechanisms and data linking with approved systems.
Submit data on emission-related activities, current reduction measures, planned future measures, and expected reduction results using Ministry-approved forms.
Maintain records of measured emission quantities for five years from the date of each analysis. Ministry employees with judicial officer capacity may access these records during this period.
The law establishes severe financial penalties for violations:
Article 15 stipulates that sources violating Article 6(1) provisions face fines between AED 50,000 and AED 2,000,000. Article 16 doubles these penalties for repeat violations within two years of a final judgment.
Additionally, Article 17 authorizes the Cabinet to establish administrative penalties and violations through subsequent resolution, including mechanisms for complaint filing and fine allocation.
The law operationalizes the UAE's Net Zero 2050 commitment through a structured framework:
Annual Targets: Article 5 mandates that the Cabinet shall determine annual emission reduction targets for all sectors at the national level, aligned with economic development priorities and international best practices.
Adaptation Plans: Article 7 requires competent authorities to develop and implement adaptation plans for infrastructure, energy, environment, health, and insurance sectors, including risk assessments and early warning systems.
National Carbon Credit Registry: Article 9 establishes a national record tracking carbon emissions, carbon credits, and credit projects, enabling both mandatory and voluntary carbon offsetting.
Article 18 provides a grace period: "Sources subject to the provisions of the present Decree-Law shall adjust their status in accordance with the provisions of the present Decree-Law and the resolutions issued in implementation thereof, within (1) one year from the date of entry into force of its provisions."
With the law entering force in May 2025, businesses have until approximately May 2026 to achieve compliance. However, given the complexity of establishing measurement systems and the five-year record-keeping requirement, immediate action is prudent.
While awaiting specific Ministry resolutions on thresholds, prudent businesses should:
The law creates several mechanisms that transform compliance into competitive advantage:
Carbon Offsetting: Article 10 incentivizes emission reduction through carbon offsetting activities, emissions trading, and shadow carbon pricing. Businesses that reduce emissions below targets may generate tradeable carbon credits.
Project Feasibility: Article 10(2) mandates climate performance indicators in project feasibility studies, measuring emissions during construction and operation phases. Early compliance positions firms favorably for government contracts.
International Cooperation: Article 11 enables UAE businesses to participate in international cooperation mechanisms, potentially accessing climate finance and technology transfer.
