The UAE is taking a significant legal step toward environmental accountability in a region long associated with oil wealth and rapid development. As climate change intensifies and global scrutiny increases, the UAE has passed a comprehensive new law that makes climate action a priority and a legal obligation.

The new climate law requires companies to limit emissions or face fines, marking a “pivotal shift” in national environmental policy.

Federal Decree-Law No. 11 of 2024 on the Reduction of the Effects of Climate Change, effective from Friday, mandates emissions reporting and climate adaptation across all sectors, including heavy industry, healthcare, energy, and businesses in free zones. This is the first time climate action has been legally required in the UAE.

Companies must submit regular emissions reports, develop decarbonization plans aligned with the UAE’s Net Zero 2050 strategy, and implement monitoring systems that meet international standards. Non-compliance could result in fines of up to Dh 2 million ($544,588).

“This law marks a pivotal shift in the regulatory landscape,” said Antonios Vouloudis, senior director of sustainability and stewardship at NYU Abu Dhabi. “Climate action is no longer a voluntary effort. It is a legal requirement and a critical element of long-term business resilience and competitiveness.”

Experts expect early enforcement to focus on large emitters in sectors such as energy, manufacturing, construction, and transport. Still, the law has a wide reach. “It applies to everyone, even free zones,” said Amer Arafat of consultancy Element Six. “It is the most significant change to corporate accountability since financial audits were made mandatory.”

The law also introduces a National Carbon Credit Registry to support carbon trading and shadow pricing. “While offsetting can help entities achieve compliance, its effectiveness depends on the integrity of offset projects and proper regulation to avoid greenwashing,” said Dr Aseel Takshe of Canadian University Dubai.

Greenpeace Mena called the law “bold and progressive.” Mr Vouloudis concluded, “This is the scaffolding. The next step is to operationalise it through clarity, enforcement, and incentives.”