Federal Decree-Law No. 11 of 2024 has turned climate reporting in the UAE from a voluntary gesture into a legal duty with a compliance deadline of May 2026, mandatory emissions reporting, and fines reaching AED 2 million. Here is what every business needs to know, and do.

For years, managing carbon emissions in the UAE was a matter of choice a reputational nicety pursued by the companies that saw value in it. That era has ended. With Federal Decree-Law No. 11 of 2024 on the Reduction of Climate Change Effects, climate compliance has become a legal obligation, complete with defined reporting requirements, firm deadlines and substantial penalties for those who fall short. For most organisations, the question is no longer whether to act, but whether they will be ready in time.

A Major Regulatory Shift

Building on the UAE’s leadership at COP28 and its commitment to net zero by 2050, the law makes the country the first in the Middle East and North Africa to place climate accountability on a binding legal footing. It was issued on 28 August 2024, entered into force on 30 May 2025, and gives organisations until 30 May 2026 to achieve full compliance.

The legislation establishes a national framework to measure greenhouse gas (GHG) emissions, monitor climate impacts, reduce emissions across sectors, strengthen climate resilience and regulate carbon-related reporting. Crucially, this is no longer a voluntary sustainability initiative: emissions management and climate reporting are now enforceable duties, overseen by the Ministry of Climate Change and Environment (MOCCAE).

Who the Law Applies To

One of the law’s most striking features is its breadth. It applies to any “Source” operating in the UAE defined as any public or private entity whose activities generate greenhouse gas emissions and explicitly extends to companies in free zones. There is no minimum size or sector threshold.

In practice, that reaches almost every business in the country: large industrials and manufacturers, logistics operators, real estate and construction firms, hospitality groups, professional-services providers and free zone entities alike. The common assumption that climate compliance is a concern only for heavy emitters is precisely the assumption the law overturns.

The Core Obligation: Measure, Report, Verify

At the heart of the law is a Measurement, Reporting and Verification (MRV) framework. Entities whose activities generate emissions must put in place the systems, records and governance to:

1. Measure emissions identify and quantify the GHG emissions produced by their operations.
2. Maintain an inventory keep emissions records using approved methodologies.
3. Report periodically submit climate and emissions reports in the prescribed format.
4. Retain documentation preserve emissions records and supporting evidence for at least five years.
5. Cooperate with regulators provide access to data and records on request.

Reporting runs through MOCCAE’s national MRV Transparency System and its Integrated Emissions Quantification Tool (IEQT), both live since October 2025. Scope 1 and Scope 2 emissions are the immediate focus, with Scope 3 value-chain emissions widely expected to follow from 2027. Data is subject to verification, and for the largest emitters independent third-party assurance already applies.

Timelines and Penalties

The compliance path is short. The law took effect on 30 May 2025, and the one-year transition period closed on 30 May 2026 the date by which in-scope organisations were expected to have their measurement, reporting, inventory and record-keeping systems in place. MOCCAE has informally signalled that this deadline may be extended while technical guidance is finalised, but no official date has been confirmed; the prudent course is to plan immediately and treat any extension as a bonus.

These sanctions apply without prejudice to stricter penalties under other UAE legislation, and further measures including operational restrictions, licence suspension and exclusion from government procurement may follow in serious cases. For many businesses, though, the commercial fallout could outweigh the fines; customers, lenders and investors are increasingly asking for evidence of compliance before they commit.

How to Prepare

With the deadline approaching, five steps should be underway now:

1. Determine applicability confirm whether your operations generate emissions and qualify as a “Source.”
2. Establish a baseline identify your major emission sources and build a GHG inventory.
3. Set up data collection create systems to capture energy, fuel, transport and operational data.
4. Assign ownership give clear internal responsibility for compliance, reporting and regulatory engagement.
5. Ready your reporting adopt approved methodologies and maintain documentation that meets MRV standards.

None of this is unduly complex, but it does take time to do well. The underlying data already exists within your organisation the real work is assembling it into a structured, traceable inventory that applies a consistent methodology and can withstand independent verification. Most organisations do not struggle because data is missing. They struggle because it has never been organised with a regulator in mind.

Built for This Moment

At Baker Tilly UAE, our ESG and sustainability practice brings end-to-end advisory, assurance and transformation support backed by more than two decades of sustainability experience across our global network. We help organisations interpret the law, identify and close compliance gaps, build robust MRV systems, and convert a regulatory obligation into a foundation for stronger, better-governed operations.

Unsure whether your organisation is ready? Baker Tilly UAE offers a Climate Compliance Readiness Assessment a high-level review of your current position, the key gaps to address, and practical steps to meet the requirements of Federal Decree-Law No. 11 of 2024.