Why Federal Decree-Law No. 11 of 2024 Is a Game-Changer for UAE's Carbon-Intensive Industries

Marking a major transformation from voluntary action to mandatory carbon accountability, the UAE’s Federal Decree‑Law No. 11 of 2024, is surely turning the sustainability tide in the area. Coming into effect May 30, 2025, the law will be applicable across both public and private sectors, including free zones, states the official website of the United Arab Emirates. Not only does it make it legally binding for companies to track and cut their carbon emissions, but non-compliance can lead to them being levied with fines ranging from AED 50k to AED 2M.

What the Law Requires from Carbon‑Intensive Sectors

Decree‑Law 11 requires accurate measurement, reporting, and verification (MRV) of business’ direct and indirect carbon emissions (Scope 1 and 2 emissions). A plan to include supply chain or scope 3 emissions is also in place. Government bodies, including those in free zones, must also develop climate action plans for key sectors, set yearly emissions reduction targets, and support cleaner technologies such as carbon capture, energy efficiency, and carbon offsets. Other high-emission sectors such as oil and gas, infrastructure, manufacturing, and logistics will be among the first ones to fall under this regime.

Photo by ZQ Lee on Unsplash

Recent Policy Moves & Market Signals

Underlining its commitment to cutting carbon emissions, the UAE has taken major steps over the past year. Starting off, the Environment Agency – Abu Dhabi has unveiled mandatory programme for large employers and industries to measure, report, and verify (MRV) their emissions starting 2026. The MRV rules were officially announced on December 26, 2024, marking a significant step toward domestic carbon pricing and transparency.

Besides this, a national carbon credit registry was launched on June 28, 2024. Under Cabinet Resolution No. 67 of 2024, companies can now generate and trade, supporting a move toward emissions trading and offset markets. Following this, the capital has mandated that major emitters participate in MRV systems and register carbon credits via the national registry. Failure to comply could lead to fines up to AED 1 million or suspension of trading privileges.

The UAE is also positioning itself as a regional carbon hub. The Dubai Financial Market’s carbon credit pilot, launched in December 2023, and the UAE Carbon Alliance was formed in May 2023, indicate the growth of a strong momentum in voluntary carbon trading.

What This Means for UAE Businesses?

Sustainability has taken centrestage in UAE with the new law. UAE companies will now need to implement systems to measure and report their carbon emissions every year, with certified data that must be stored for five years. They will also be expected to shift to cleaner technologies, including the adoption of energy-efficient equipment, sourcing renewable energy, and exploring solutions like carbon capture or nature-based offsets. Therefore, companies that act early can benefit from access to carbon credit markets, emissions offset trading, and better financing options linked to sustainability performance. Firms that proactively embrace carbon intelligence gain a compliance edge, avoid hefty penalties, and become frontrunners for low-carbon financing and sustainable public tenders.

Fitsol Is Already on the Ground

Fitsol, a number one decarbonization partner, is ahead of the curve, already engaging with several UAE-based manufacturers, logistics providers, and infrastructure firms to kickstart MRV systems and develop sectoral decarbonization roadmaps. With our local office launching soon as well, we’re embedding emissions intelligence tools to help clients generate verified, audit-ready emissions data, align with evolving MOCCAE guidance, and reach carbon credit incentives.

As the UAE accelerates toward Net Zero by 2050, the industrial sector’s ability to measure, reduce, and report emissions will define its place in tomorrow’s economy.

Citations:

United Arab Emirates: Announcing the Federal Decree-Law No. (11) of 2024 on the reduction of climate change effects - BDO