The UAE’s Federal Decree-Law No. (11) of 2024 on the Reduction of Climate Change Effects marks a clear turning point in how climate action is governed in the country. Rather than encouraging voluntary disclosures, the law establishes a federal, legally binding framework for measuring, reporting, and managing greenhouse gas (GHG) emissions. It entered into force on May 30, 2025, with a transition period intended to give organizations time to build the systems and controls needed to comply.

For executives, the takeaway is simple: climate reporting and emissions management in the UAE are now treated as regulated compliance obligations, not discretionary sustainability initiatives.

Why the Law Exists—and Why It Matters at the Board Level

The law is designed to reduce climate-related impacts on the UAE’s economy, environment, and society by improving transparency, accountability, and planning around emissions and climate risks. It also supports the country’s broader national climate objectives by ensuring that emissions data and reduction efforts are consistent, comparable, and enforceable.

From a governance perspective, this elevates climate from a reputational or reporting topic into the realm of enterprise risk management, with direct regulatory oversight and financial consequences for non-compliance.

Scope: Broad Coverage With Few Safe Harbors

The law applies to public and private legal persons and individual enterprises operating in the UAE, with no carve-out for free zones. In practice, this means:

• Onshore entities are clearly in scope

• Free-zone entities should assume applicability unless explicitly exempted

• Both domestic companies and foreign-owned subsidiaries are covered

Organizations should not rely on licensing structure, jurisdictional nuance, or parent-company location to assume they fall outside the law’s reach.

Core Obligations Companies Need to Prepare For

While implementing regulations will further clarify technical details, the law establishes several clear expectations:

1. Measure and report GHG emissions
Companies are expected to quantify greenhouse gas emissions (such as carbon dioxide and methane) using recognized monitoring, reporting, and verification (MRV) approaches. Emissions data must be credible and suitable for regulatory review.

2. Maintain supporting records
Emissions data and related methodologies must be documented and retained. This turns climate data into regulated records, similar to financial or operational compliance documentation.

3. Develop and disclose emissions reduction measures
Reporting is not limited to historical data. Companies must also describe the actions they are taking—and plan to take—to reduce emissions over time.

4. Align with national climate targets
Authorities will define emissions reduction targets and sector-level expectations. Companies will be expected to align their internal plans and disclosures with this national direction.

Timing and Enforcement Expectations

The law became effective on May 30, 2025, with an expected one-year transition period leading to full compliance by May 30, 2026. After that point, enforcement provisions apply.

Penalties for non-compliance can range from AED 50,000 up to AED 2 million, with the potential for escalation in cases of repeated or ongoing violations. This positions climate compliance alongside other material regulatory risks that require executive oversight.

Beyond Reporting: Laying the Groundwork for Climate Markets

An important secondary effect of the law is that it establishes the infrastructure needed for carbon-related market mechanisms, such as carbon credits or emissions trading. While participation in these mechanisms may create future incentives, they rely on accurate, auditable emissions data—making compliance with the core reporting and record-keeping requirements a prerequisite rather than an optional step.

What Multinationals With UAE Operations Should Keep in Mind

For multinational companies—particularly those headquartered outside the UAE—the law applies at the local entity level, regardless of how sustainability reporting is handled globally. Even if a parent company reports under international frameworks, UAE entities must be able to demonstrate:

• Locally compliant emissions data

• Clear internal accountability for climate obligations

• Documentation suitable for regulator inspection

In short, this law should be treated like any other jurisdiction-specific regulatory requirement: embedded into compliance programs, owned by accountable leaders, and supported by systems that can stand up to scrutiny.