UAE’s New Climate Law focuses on R&D, Innovation & Sustainability

The UAE Cabinet has recently issued the Federal Decree-Law No. (11) of 2024 ‘On the Reduction of Climate Change Effects’ [“climate law”], which comes into effect on 30 May 2025, directly feeds into the UAE’s broader sustainability strategy by providing a regulatory framework to support the country’s ambitious climate goals. The climate law is a direct legal mechanism supporting the UAE’s Net Zero 2050 strategy, which commits the country to achieving net-zero carbon emissions. Through mandatory reporting and emission reduction obligations, the UAE can stay on track to meet its national strategy. Under the climate law, the UAE Ministry of Climate Change and Environment (MOCCAE) will have the authority to issue climate-related resolutions applicable to public and private entities (including those in free zones).

In turn, this empowers both public and private sectors to contribute to the decarbonisation of key industries, a core element of the UAE’s sustainability ambitions. Moreover, the MOCCAE will play critical role in overseeing compliance, establishing policies, and ensuring that all sectors contribute to the national sustainability agenda. With the UAE positioning itself as a global leader in sustainability, innovation, and sustainable research & development (R&D), this new climate law represents a clear message that climate action is not just an environmental necessity but an economic imperative.

Key highlights of the climate law include comprehensive measures to reduced carbon emissions, introducing policies to promote green energy and sustainable practices across industries and supporting innovation and R&D. This is in conjunction with current strategies on fostering innovation and sustainability through UAE’s Energy Strategy 2050, that identifies R&D as a key enabler to achieving the stated goals, and Emirate specific initiatives such as the Dubai Clean Energy Strategy 2050, which supports infrastructure capabilities through innovative solutions. The R&D governance policy is another strategy that links together the climate law and R&D practices towards a unified position on tackling climate change effects in the country.

The climate law is specific in ways it defines and will undertake action. Namely, article 4 which lists the ways in which emissions will be reduced and achieving climate neutrality. Such examples include using clean energy, carbon offsetting, using alternatives to saturated fluorocarbons, and carbon capture, use and storage (CCUS), among other mechanisms. Of great interest is Article 10, which deals directly with the incentives that directly support innovation and R&D. The establishment of a National Carbon Credit Registry, under the direction of The Ministry, will help the application of policies and mechanisms, such as facilitating carbon offsetting activities, emissions trading, and adopting shadow prices of carbon. There are further ideas to develop and implement adaptation plans in the sectors of infrastructure, energy, environment, health, insurance, and any other sector determined by the MOCCAE or the competent authority.

Penalties for committing any violation of the provisions listed in the law shall be punished by a fine of not less than (AED 50,000) fifty thousand dirhams and not more than (AED 2,000,000) two million dirhams.

The law mandates industries to transform their operations to meet emissions reduction targets and implement climate resilience plans. Our transformation practice supports businesses in reimagining their business models, helping them transition from traditional high-carbon activities to low-carbon, sustainable operations. This includes offering legal advice on energy transition projects, sustainable supply chain management, and ESG (Environmental, Social, and Governance) compliance.

Our Transformation & the future Economy Practice as well as our Innovation, Patents, and Industrial Property (3IP) Practice are well equipped to provide clients with strategic guidance on complying with these new regulations. Our team of experts are experienced in handling matters to R&D, Innovation & Transformation which helps companies foster best practices by transforming and promoting sustainable solutions using innovation pipeline and other structural change. We help businesses stay ahead by offering insights into transformation strategies, policy developments, regulatory risks, and how to leverage new market opportunities stemming from carbon trading and sustainability initiatives.

For any enquiries, please contact Ahmad Saleh, Partner & Head of 3IP and Co-Lead of the Transformation Practice, with a copy to the transformation & innovation teams (transformation@tamimi.com and 3IP@tamimi.com).