UAE’s Landmark Climate Law and Its Game-Changing Impact on Voluntary Carbon Markets
On May 30, 2025, the United Arab Emirates enters a new era of climate governance with the enforcement of Federal Decree-Law No. (11) of 2024 on the Reduction of Climate Change Effects. This landmark legislation builds the foundation for a national framework to measure, report, and reduce greenhouse gas (GHG) emissions, while unlocking the potential of both mandatory and voluntary carbon markets.
Applicable to all emission sources within the UAE—including those in free zones—the law introduces wide-ranging responsibilities for public and private sector actors. It signals a structural shift in how emissions are managed, tracked, and compensated, creating new opportunities and obligations for companies operating across the region.
Building a National Carbon Infrastructure
A core provision of the law is the creation of a National Carbon Credit Registry, managed by the Ministry of Climate Change and Environment (MOCCAE), in coordination with relevant local authorities. The registry is designed to track emissions data and record information on carbon credits and their retirement—supporting both mandatory and voluntary offsetting mechanisms (Article 10, Clause 3).
Entities deemed significant sources of GHGs—based on criteria to be defined by the Ministry—will be required to:
Measure emissions and maintain an emissions inventory
Submit periodic GHG reports
Retain emissions data for five years
Comply with emission reduction measures (Article 6)
These reports will follow measurement, reporting, and verification (MRV) standards determined by the Ministry, in consultation with competent authorities.
Voluntary Leadership and Inclusive Participation
While reporting obligations will apply to designated emitters, the law also supports voluntary participation in offsetting activities. Article 10 outlines a framework to incentivize carbon offsetting and emissions trading, encouraging all entities to contribute to national climate goals.
The government is empowered to issue climate performance indicators, implement shadow carbon pricing, and create mechanisms for evaluating climate impact during project development and operations. This ensures that even businesses not directly subject to mandates can demonstrate climate leadership and align with evolving international expectations.
Legal and Financial Accountability
The law makes clear that emissions management is not solely the responsibility of sustainability departments. Under Article 6, designated entities must prepare, submit, and store emissions data—while enabling audits by appointed officers with judicial powers (Article 14).
Non-compliance can result in fines between AED 50,000 and AED 2 million, with penalties doubling for repeated violations within two years (Articles 15–16). These provisions elevate climate-related obligations to a matter of legal and financial risk—placing climate strategy firmly on the boardroom agenda.
Connecting to Global Markets
Although the law does not prescribe a fixed carbon price or a national emissions trading system (ETS), carbon offsetting and trading are explicitly recognized. Article 10 authorizes incentive policies that include:
Facilitating carbon offsetting activities
Supporting emissions tradingRecognizing the shadow price of carbon
Additionally, Article 11 mandates international cooperation to strengthen the UAE’s role in global climate mitigation. While the law does not mention specific mechanisms under the Paris Agreement, such as Article 6.2 or 6.4, the inclusion of global engagement points to future cross-border credit recognition.
Preparing for Compliance and Opportunity
Businesses subject to the law must adjust their status within one year of its effective date (Article 18). During this transition period, companies are encouraged to:
Build a robust GHG inventory
Evaluate mitigation strategies
Explore carbon credit procurement pathways aligned with national standards
This preparatory phase is critical—not only for legal compliance, but also for positioning within a more transparent, accountable, and climate-conscious business environment.
How Carbonmark Supports This Transition
At Carbonmark, we provide a trusted, transparent platform for organizations looking to source verified carbon credits and engage in meaningful climate action. Our infrastructure offers:
Real-time access to a wide selection of projects
Transparent, market-based pricing
Blockchain-based traceability to ensure credibility
Whether you’re a corporate emitter preparing for mandatory reporting, or a voluntary buyer looking to lead in sustainability, Carbonmark is your partner for integrating carbon markets into your climate strategy.
📩 Contact our Solutions Team to explore how we can help you meet your compliance goals and scale your impact under the UAE’s new national climate law..
