What is UAE Decree Law No. 11? Climate Change Legislation, Key Provisions & Impact

What is UAE Decree Law No. (11) and its Purpose

The UAE Climate Change Law, or the Federal Decree Law No. (11) of 2024 on Reduction of Climate Change Effects, has been effective since May 30, 2025. In essence, the law requires businesses to manage the impact of climate change by tackling carbon emissions. 

It is compulsory for businesses registered in the UAE to track and manage their carbon footprints by measuring GHG (Greenhouse Gases). Business activities must align with the national carbon neutrality and climate goals. The UAE Climate Change Law contributes to the UAE’s commitment to achieving net-zero emissions.

UAE Climate Change Law and Legislative Context

The Paris Agreement is aimed at tackling rising global temperatures and their impact on the environment and communities. This agreement plays an important role in the Sustainable Development Goals of the UN and also serves as the backdrop for the relatively new climate legislation of the UAE.

The Federal Decree Law functions as the foundation upon which the UAE Net Zero 2050 Strategy, supporting climate-conscious social and economic advancement, has been designed. The framework provided by the law enables the country to evolve into an economy that is less dependent on oil and relies on clean energy for economic growth.

Key Provisions of the UAE Decree Law No. (11)

All public and private sector enterprises, including individual enterprises and organisations that contribute to carbon emissions, have to comply with the key provisions laid out in the UAE Federal Decree Law No. (11). 

1. Mandate for reduction in GHG emissions

Provides for the mitigation of climate change by limiting emissions and setting emission reduction targets for businesses operating in every sector.

2. Adoption of green solutions

Encourages businesses to take up smart solutions like precision farming, water-efficient irrigation, sustainable transport, protection of biodiversity, and ecosystems.

3. Application of climate resilience strategies

Requires companies to build climate resilience strategies to mitigate risks and use early warning systems to prepare for warming-induced financial risks ahead of time.

4. Collaborative energy transition

Encourages partnerships between public and private enterprises to transition to clean energy through mutual support and financing. 

5. Assessment and Timely Disclosure

Requires businesses to comply with emission and sustainability reporting requirements and disclose information compliant with government guidelines.

How UAE Climate Law Impacts Businesses and Compliance

The UAE Climate Law impacts businesses and compliance exercises in outlining guidelines for climate adaptation.

Emissions: Monitoring & Reporting

Small to large-scale enterprises, along with all other organisational entities, are legally bound to disclose their GHG emissions data through the MRV (Measurement, Reporting and Verification) system. Enterprises that operate in the economically favourable free zones fall within the purview of compliance as well. 

Development of Emission Reduction Strategies

The Ministry of Climate Change and Environment (MOCCAE) of the UAE government has established emission targets in its NDC 3.0 Action Plan. Based on the GHG reduction targets set by the government, businesses have to disclose their emission reduction action plans and strategies.

Non-Compliance Penalties

Businesses have been allowed time up to 30 May 2026, in order to transition into the required systems for measuring and reporting emissions. Once this time period has been exhausted, enterprises that fail to comply with the UAE Climate Change Law may have to pay fines ranging from AED 50,000 to AED 2 million. Repeat offenders will be charged higher penalties, and more severe violations will also escalate penalties. 

Implementation and Reporting Requirements Under The Law

Compliance-readiness involves proper implementation and reporting under the Federal Decree Law.

1. Assess Tracking Mechanisms and Data Gaps

Measure the existing standards of climate resilience policies and actions in the company. Set a credible baseline for GHG and data collection. Also, evaluate tracking methodologies and whether existing frameworks can be flexibly adjusted to comply with the UAE Climate Change Law. 

2. Engagement with Stakeholders

Involve stakeholders like regulators and government officials to gain more insight into which methodologies are acceptable and how to approach them. Identify measures and best practices through industry assistance that help your business fill gaps and align with legal guidelines.

3. Strategising Carbon Reduction

Formulate effective GHG reduction plans that line up with the annual targets provided by the UAE’s Environmental Ministry. Explore clean energy options like renewable sources, green technologies, smart irrigation, and supply chain sustainability measures.

Challenges and Considerations In Complying With The Law

A data-heavy annual exercise, compliance with the UAE Climate Change Law comes with multiple challenges.

Data Collection Challenges

The law mandates reporting of Scope 1 (direct emissions) and Scope 2 (purchased energy) emissions, while Scope 3 (value chain) reporting may be required for certain sectors or encouraged as a best practice depending on regulatory guidance. Emissions measurement is typically expected to follow recognised international standards, such as ISO 14064 or other accepted greenhouse gas accounting frameworks. However, inconsistencies in data can make accurate measurement troublesome and lead to compliance issues. 

Evolving Standards

Regulatory standards and guidelines are constantly evolving across the globe. Some of these, like the TCFD and GRI (Global Reporting Initiative), are considered best practices under the UAE Climate Change Law. Changes or evolution in their frameworks can make accurate reporting difficult. 

Manual Imperfections

Manual reporting can lead to significant errors and compliance issues for businesses. Although automation is permitted for data collection under the MRV system, a lot of processes that have to be conducted manually can be demanding in terms of time and cost.

Key Takeaways

The UAE Climate Change Law encourages businesses to transition into clean energy by increasing the use of renewable sources, smart agriculture, and green technology. 

Through Oren’s Sustainability Solutions, conforming to the guidelines provided in the Federal Decree Law becomes simpler. Assurance-ready reports and credible climate-related disclosures remove reporting challenges, facilitate effective gap analysis, and help your business integrate GHG emission targets into corporate strategies.

Frequently Asked Questions (FAQs)

Q1. What is the UAE Federal Decree Law No. (11)?

A crucial milestone in the UAE’s climate change policy, the UAE Federal Decree Law No. (11), acts as a key legislation in reducing carbon emissions and mitigating warming impacts.

Q2. What does the UAE climate law cover?

The UAE Climate Law covers emission reduction targets in alignment with the UN’s Paris Agreement. It encourages innovation and research for climate solutions and aims to achieve carbon neutrality in the country.

Q3. Who must comply with UAE Decree Law No. 11?

Enterprises from all categories (public and private), including those operating in free zones, have to comply with the guidelines laid down in the Federal Decree Law.

Q4. Is UAE Decree Law No. 11 mandatory for businesses?

The UAE Climate Change Law is mandatory for all businesses functioning within the UAE.

Q5. How does UAE Decree Law No. 11 affect carbon reporting?

Through this climate legislation, carbon reporting has been made mandatory for public and private enterprises. They are now legally required to measure, record, and report data related to GHG emissions generated by their business.

Q6. What are the penalties for non-compliance?

Penalties for non-compliance range from payments of AED 50,000 to AED 2 million. Repeat offenders will need to pay a higher fine amount.

Q7. How does this law support the UAE’s climate goals?

Through consistent and periodic monitoring of GHG emissions and sustainability compliance of businesses, the UAE will be able to achieve net-zero emissions and other climate targets in the upcoming decades.