Following its hosting of COP28, the UAE is reinforcing its climate goals through the implementation of actionable policies. Central to this effort is the National Register for Carbon Credits (“Register”), a system designed to track, trade, and retire emissions offsets. Established pursuant to Cabinet Decision No. 67 of 2024 and forming part of the broader framework introduced under Federal Decree‑Law No. 11 of 2024 on Limiting the Impact of Climate Change, the Register moves beyond policy objectives to provide a practical compliance and market mechanism. It enables businesses to manage their carbon footprint while supporting the Nation’s Net Zero 2050 objective.
Who Is Affected
The Register applies across the UAE, including free zones, and distinguishes between mandatory and voluntary participation:
- Mandatory participation applies to entities classified as “Entities with Huge Carbon Emissions”, defined as entities generating 0.5 million metric tons or more of carbon dioxide equivalent annually from Scope 1, direct emissions and Scope 2, indirect emissions.
- Voluntary participation is available to entities with emissions below the 0.5 million metric ton threshold (“Participating Entities”). Once registered, voluntarily participating entities are subject to the same compliance obligations as mandatory participants.
Key Compliance Obligations
Monitoring, Reporting, and Verification (MRV)Covered entities must:
- Measure greenhouse gas emissions on an ongoing basis;
- Submit annual emissions reports;
- Apply IPCC‑approved methodologies, using 2019 as the baseline year; and
- Ensure emissions data and reduction claims are verified by accredited ISO‑compliant verification bodies.
Registration and Certification
Entities seeking to generate or trade carbon credits must register with the Register administered by the Ministry of Climate Change and Environment. Mandatory registrants must submit:- A valid commercial or industrial license;
- Facility‑level emissions data;
- Details of emission reduction or carbon removal measures;
- Information on any internationally traded carbon credits; and
- Any additional documentation required by the Ministry.
Only verified and certified emission reductions that are real, measurable, and aligned with Article 6 of the Paris Agreement may be converted into certified carbon credits. Credits may be certified for eligible activities dating back to 2019.
Carbon Credit Trading and Market Oversight
Certified carbon credits are treated as financial instruments and may be traded through licensed platforms.
The Securities and Commodities Authority (SCA) is responsible for:
- Licensing carbon credit trading platforms;
- Regulating trading, clearing, and settlement;
- Supervising market conduct; and
- Enforcing compliance and investigating violations.
High emission entities may purchase credits to offset residual emissions, while certified credits may also be traded through approved international platforms, subject to regulatory approval. Credits that have been retired may not be reused.
Note: As of January 1, 2026, the SCA has been reconstituted as the Capital Market Authority (CMA), which now oversees these functions.
Enforcement and Penalties
The framework is supported by a robust enforcement regime:
- Administrative fines of AED 100,000 to AED 2,000,000 may be imposed for non‑compliance, including failures to measure, report, or verify emissions.
- The SCA may impose additional penalties, including warnings, fines of up to AED 1,000,000, and suspension or cancellation of trading activities or platform licenses.
- These penalties operate without prejudice to criminal fines under Federal Decree‑Law No. 11 of 2024, which may reach AED 2,000,000 for specified violations.
Entities subject to the Cabinet Decision must regularize their position within six months of its entry into force.
Key Takeaways for Businesses
- Entities above the emissions threshold should assess compliance readiness immediately.
- Voluntary participation triggers the same compliance obligations as mandatory registration.
- MRV systems, verification arrangements, and internal governance processes should be reviewed and updated.
- Carbon credit strategies may present both compliance solutions and commercial opportunities, but require careful regulatory alignment.
Conclusion
The Register introduces a structured compliance and market framework that will have material implications for industrial, energy‑intensive, and sustainability‑focused businesses operating in the UAE. Early assessment and preparation will be critical to managing regulatory risk and leveraging opportunities under the new regime.Note: This Legal Update / Newsletter is intended for general informational purposes only and should not be construed as legal advice. It is based on laws and legal interpretations in effect as of the date of publication. Laws and regulations may change over time, and their application can vary depending on individual circumstances. Readers are strongly encouraged to seek specific legal counsel before acting on any of the information provided herein.rian and religious purpose in accordance with the law.