With only weeks remaining before the final compliance deadline of UAE Federal Decree-Law No. (11) of 2024 on the Reduction of Climate Change Effects, businesses operating in the United Arab Emirates — including those established in free zones — face an unprecedented environmental statutory milestone. The Decree-Law was issued on 28 August 2024 and came into force on 30 May 2025, with 30 May 2026 set as the cut-off date for full compliance with its core obligations: measuring greenhouse gas (GHG) emissions, disclosing them periodically, and adopting structured plans to reduce them.
Who is covered by the law?
One of the most distinctive features of Federal Decree-Law No. 11 of 2024 is the breadth of its scope. Article 2 extends application to every entity operating on UAE territory, regardless of size, sector, or legal form, and explicitly captures companies based in free zones. This represents a significant legislative shift. Earlier environmental obligations were largely confined to heavy industry or energy-intensive sectors; under the new framework, commercial enterprises, financial institutions, services businesses, and professional offices — including law firms and consultancies — are bound by the same disclosure and measurement architecture.
Core obligations: measure, disclose, reduce
The Decree-Law imposes three interlocking obligations on covered entities. First, entities must measure their greenhouse gas emissions in accordance with the standards approved by the competent authorities. This includes direct emissions (Scope 1) arising from on-site combustion such as fuel burned at facilities or in fleet vehicles, and indirect emissions (Scope 2) arising from purchased energy such as electricity and district cooling. Second, entities must disclose these emissions to the competent authority on the schedule and using the templates set out in the executive regulations. Third, they must prepare and implement clear, measurable reduction plans capturing both existing and planned mitigation measures, with verifiable targets and milestones.
From a practical standpoint, entities whose combined Scope 1 and Scope 2 emissions exceed 0.5 million tonnes of CO₂-equivalent annually are subject to immediate reporting obligations. Scope 3 disclosure — covering indirect value-chain emissions — is widely anticipated to become mandatory from 2027 onward, based on the regulatory commentary and guidance issued to date, although this has not yet been crystallised in a binding legislative text.
Penalties: a dual administrative-financial regime
The Decree-Law sets out a robust dual sanctions regime combining financial penalties and administrative measures. On the financial side, fines range from AED 50,000 up to AED 2,000,000 per violation, and they double in cases of repeat violations within two years of the first offence — reaching up to AED 4,000,000. On the administrative side, competent authorities are empowered to impose additional measures, including activity restrictions, suspension of licences, and orders requiring the entity to undertake corrective environmental measures at its own expense, calibrated to the severity and recurrence of the breach.
Practical steps before 30 May 2026
Given the compressed timeline, we recommend that entities act on a focused practical agenda. First, conduct an initial assessment of liability under the Decree-Law and determine whether the entity falls within the high-emitter threshold. Second, build an internal Scope 1 and Scope 2 inventory backed by energy consumption, fuel, and fleet data. Third, designate an internal environmental compliance coordinator responsible for disclosure and follow-up. Fourth, review existing commercial contracts to integrate sustainability and disclosure obligations into supplier and contractor terms. Finally, document a reduction plan with clear annual targets that are verifiable by auditors and regulators.
Federal Decree-Law No. 11 of 2024 should not be read as a stand-alone environmental statute. It is a cornerstone of a broader legislative ecosystem that includes ESG disclosure obligations and related accounting and audit requirements. Mohamed Alazazi Advocates & Legal Consultants stands ready to assist entities in aligning their operations with this new framework — through compliance assessments, contract review, and representation before the competent regulatory authorities should any dispute or alleged violation arise.