What Is Federal Decree-Law No. 11/2024? A Plain-English Guide for UAE Businesses

A New Era for Environmental Accountability in the UAE

In late 2024, the UAE government enacted Federal Decree-Law No. 11/2024 on the regulation of greenhouse gas (GHG) emissions. This landmark legislation marks the country's most significant step toward meeting its Net Zero 2050 commitment and fulfilling its obligations under the Paris Agreement.

If you run a business in the UAE, this law may directly affect you. This guide breaks down the decree in plain English — no legal jargon, no confusion — so you can understand exactly what it means and what you need to do.

What Does the Law Actually Say?

Federal Decree-Law No. 11/2024 establishes a mandatory GHG emissions reporting framework for businesses operating in the UAE. The law requires qualifying entities to:

• Measure and calculate their greenhouse gas emissions annually
• Submit official emissions reports to the Ministry of Climate Change and Environment (MOCCAE)
• Follow standardized methodologies and emission factors approved by the Ministry
• Maintain accurate records and documentation for audit purposes

The law also grants MOCCAE the authority to set reduction targets, issue guidelines, and impose penalties for non-compliance. This is not voluntary — it is a federal legal obligation.

Who Must Comply? Phase 1 Criteria

The law rolls out in phases. Phase 1, which is already in effect, applies to entities that meet any one of the following criteria:

• Annual revenue of AED 250 million or more
• 250 or more employees
• Operations in designated high-impact sectors (energy, oil and gas, manufacturing, transport, waste management, construction, and heavy industry)
• Annual emissions of 500,000 tonnes of CO2 equivalent (tCO2e) or more

If your business meets even one of these thresholds, you are required to report under Phase 1. There are no exemptions for free zone entities — the law applies across the entire UAE, including JAFZA, DMCC, DIFC, ADGM, and all other free zones.

Phase 2: The 2027 Expansion

Phase 2, expected to take effect in 2027, will significantly expand the scope of mandatory reporting. The Ministry has indicated that Phase 2 will lower the revenue and employee thresholds to capture mid-sized businesses, expand the list of designated sectors, and potentially require Scope 3 emissions reporting. Companies that build reporting infrastructure early will find Phase 2 compliance far less disruptive.

Penalties: What Happens If You Don't Comply?

The law carries serious financial penalties:

• AED 50,000 to AED 2,000,000 in fines for failure to report, late submission, or inaccurate reporting
• Doubled penalties for repeat offences — a second violation could cost up to AED 4 million
• Potential additional administrative sanctions including suspension of operating licenses in severe cases

What Businesses Need to Do Now

If you suspect your business may fall under Phase 1, here is a practical action plan:

• Step 1: Determine your eligibility — review revenue, headcount, sector, and estimated emissions
• Step 2: Identify your emission sources — map Scope 1 (direct) and Scope 2 (electricity) sources
• Step 3: Collect baseline data — gather utility bills, fuel records, fleet logs for the reporting year
• Step 4: Choose the right tools — purpose-built GHG software ensures correct UAE emission factors and MOCCAE compliance
• Step 5: Engage an expert if needed — a sustainability consultant who understands the UAE regulatory landscape saves weeks of guesswork

Check Your Eligibility Today

Not sure if your business needs to report? Check your eligibility with SmartFenek's free assessment. Answer a few questions about your business, and we will tell you exactly where you stand — and what steps to take next.