Preparing for the UAE 2025 Climate Reporting Law

What the UAE Climate Law Means for Business Leaders in 2025 

In 2024 the UAE took a decisive step in its climate leadership by enacting Federal Decree-Law No. 11 of 2024 on the Reduction of Climate Change Effects.  

Effective 30 May 2025, this law aligns national policy with the UAE’s Net-Zero 2050 strategy, its Paris Agreement commitments and sectoral sustainability goals.  

In practice, the law mandates all public and private entities, including those in free zones, to measure, track, and manage their greenhouse gas emissions. In clear language, it requires companies to establish robust emissions management systems: measuring emissions regularly, preparing a GHG inventory, submitting periodic reports, and implementing plans to cut emissions. 

By embracing this framework, businesses not only comply with regulations but also position themselves for emerging opportunities. Companies that build strong carbon accounting practices stand to gain energy cost savings, attract green financing, and strengthen their brand with customers and investors. In effect, the law encourages the UAE’s firms to innovate, integrating sustainability into strategy can unlock competitive advantages and long-term resilience in a carbon-constrained world. 

Who Is Covered – and When 

The new law has nationwide scope, applying to all entities whose activities release greenhouse gases, whether government-owned or private, including those in economic free zones. In simple terms, if your operations emit CO₂ or other GHGs, the law applies. Full compliance will be mandatory from 30 May 2025. (Because the decree was issued in August 2024, many organisations are already laying groundwork.) 

Government guidance (through implementing resolutions) further clarifies thresholds and reporting channels. For example, companies with large emissions (above ~0.5 million tonnes CO₂-equivalent per year from Scope 1 and 2) are expected to register with the national Carbon Registry and submit annual emissions reports. Smaller firms may have voluntary options. But in all cases, organisations should prepare: set up a GHG monitoring system aligned with ISO 14064 and GHG Protocol standards, and begin collecting emissions data. 

Key Requirements for Businesses 

1. Measure and Report Emissions (MRV).  
   The heart of the law is setting up of a Measurement, Reporting, and Verification (MRV) system. Designated entities must regularly measure their greenhouse gas emissions from all activities (at least Scope 1 and 2 to start) and prepare an official emissions inventory. These data must be submitted periodically in the form and format approved by the Ministry of Climate Change, which is establishing a central electronic reporting platform. Records of emissions data must be retained for at least 5 years to allow for government audits. In short, businesses should set up dedicated carbon accounting systems now, from fuel and energy meters to IT dashboards, to capture the required data. 
   
   

2. Develop Emissions Reduction Plans.  
   Beyond reporting, the law mandates action to cut emissions. Companies are expected to implement mitigation strategies such as improving energy efficiency, switching to clean or renewable energy, adopting carbon capture technologies, reducing reliance on high-global-warming-potential gases, and engaging in waste management or carbon offsetting programs. These measures echo the UAE’s national climate plans and are concrete ways to contribute to sectoral and economy-wide carbon-neutrality goals. In practice, operations teams will need to evaluate energy use, set science-based targets, and roll out projects (e.g. facility upgrades or on-site solar) to meet those targets. Many experts recommend formalising this in a Climate Action Plan or road‑map that is regularly updated. 
   
   

3. Climate Adaptation Planning.  
   The law goes beyond mitigation to also address resilience. It requires government and industry bodies to develop sector-specific adaptation plans to manage climate risks, for example, water scarcity or extreme heat impacts on infrastructure. While adaptation may be more relevant to utilities, healthcare, insurance and major infrastructure sectors, all organisations should at least consider basic climate risks. Boards and risk committees may need to oversee early warning systems and contingency measures as part of overall sustainability planning. 
   
   

4. Use of Structured Data and Digital Tools. 
   Importantly, the law anticipates the use of digital systems. It instructs the Ministry to establish an electronic platform linking emissions measurement and reporting, effectively creating a national carbon data infrastructure. For businesses, this means gathering emissions data in structured formats that can interface with government systems. Sustainability officers should therefore prioritise data quality and integration: maintain standardised data collection processes, integrate carbon metrics into finance or operations systems, and use centralised dashboards for reporting. In practice, many companies are turning to specialised software.  
   
   For example, NoviqTech’s Carbon Central platform provides a cloud-based solution where organisations can consolidate their emissions data, run analytics, and generate compliance reports. This platform uses AI-driven analytics and digital twin tools (digital replica of your operations) to give real-time visibility into energy use and emissions across projects. Leveraging such tools ensures that emissions data are not only accurate and accessible, but also actionable, exactly what regulators will be looking for. 

5. Engaging with Carbon Markets and Offsets.  
   The law also sets up incentives for innovation, including a framework for carbon credits. A companion Cabinet Resolution is creating a UAE National Carbon Registry, through which companies can register their verified emissions reductions and even trade carbon credits. In other words, businesses will have formal opportunities to offset residual emissions and potentially generate new revenue streams by participating in the growing carbon market. As part of their strategy, organisations should review these carbon credit programs and verify whether any of their low-carbon projects qualify for certified credits. 

Penalties and Compliance 

The legislation is clear that non-compliance carries significant fines. Entities found violating the MRV requirements (for example, failing to measure or report emissions) face penalties ranging from AED 50,000 up to AED 2,000,000. Repeat offences within two years trigger doubled fines. These sanctions underscore the government’s seriousness: the aim is to ensure active participation in the country’s climate goals, not to penalise inadvertently. From an operational standpoint, this makes compliance with data and reporting obligations a high priority. Avoiding penalties is straightforward with the right processes: accurate emissions accounting and timely submission of reports. 

Benefits of Proactive Climate Action 

Far from being a mere cost center, the new law can unlock tangible business benefits. Companies that proactively align with the law’s requirements often reap energy savings and efficiency gains, for example, by cutting waste and optimising processes.  

Strong emissions management also opens doors to green financing and sustainability-linked investment: lenders and investors increasingly favour companies with verified carbon disclosures. A public commitment to the law’s targets boosts brand and stakeholder trust, especially among customers who care about the environment. 

KPMG notes that organisations integrating the law’s goals into their strategy can “gain a competitive advantage in a rapidly evolving sustainability landscape”. In practical terms, early movers will be better prepared for future regulations (both domestic and export markets) and can differentiate themselves as innovators.  

Climate compliance also dovetails with other UAE priorities: diversifying the economy, developing green industries, and building a resilient workforce. Viewed in this light, the Federal Decree-Law is an opportunity to modernise operations, tap into the global shift toward low-carbon business, and even collaborate with government on new climate initiatives.