Abstract:
The United Arab Emirates has officially enacted new legislation requiring companies to monitor, report, and verify their carbon emissions as part of a broader effort to achieve carbon neutrality by 2050. This legislation, which came into force on December 28, 2024, is a significant step in the country’s environmental policy and will apply to businesses emitting the equivalent of 500,000 tons or more of carbon dioxide per year.
Key Highlights:
Effective Date: Starting December 28, 2024, all qualifying companies are mandated to comply with the new rules, which focus on tracking emissions tied to their operations.
Climate Ambitions: The UAE’s overarching goal is to become carbon neutral by 2050, and these new reporting requirements are seen as a key part of the roadmap toward achieving that target.
Regional Leadership: As the first country in the Middle East to require companies to report their emissions, the UAE is positioning itself as a regional leader in climate action and sustainability.
Focus Areas: The regulations specifically address Scope 1 emissions, which are direct emissions from owned or controlled sources (such as factory operations or vehicle fleets), and Scope 2 emissions, which are indirect emissions from the purchase of energy, like electricity.
Abu Dhabi Takes the Lead: Abu Dhabi has already rolled out its own system for companies within the emirate to measure, report, and verify their emissions and other emirates are expected to introduce similar systems in the near future.
Economic Impact: Despite the ambitious environmental goals, UAE policymakers are concerned that stringent regulations may push companies to relocate to neighbouring countries with more lenient policies, which could undermine the effectiveness of these new laws.
This concern could lead to adjustments in the stringency of the emission regulations over time.ring countries with more lenient policies, which could undermine the effectiveness of these new laws. This concern could lead to adjustments in the stringency of the emission regulations over time.