Context
As the 30 May 2026 transition deadline under Federal Decree-Law No. 11 of 2024 on the Reduction of the Effects of Climate Change (“Climate Change Law”) approaches, companies operating in the UAE are assessing the practical implications of the new framework.
The Climate Change Law was issued in August 2024 and entered into force on 30 May 2025, introducing a national framework aimed at monitoring and reducing greenhouse gas emissions.

Who Does It Apply To?
The Climate Change Law applies broadly to entities operating in the UAE, including those established in free zones such as the DIFC. The framework therefore potentially affects a wide range of businesses, including financial institutions, insurance firms and other service providers.

Overview of the Framework
At a high level, the Climate Change Law introduces a national framework for the measurement, reporting and reduction of greenhouse gas (GHG) emissions. In principle, entities are required to:

• Measure and monitor emissions generated by their operations.
• Prepare emissions inventories and submit periodic reports to the competent authorities.
• Implement measures aimed at reducing emissions and document both current and planned mitigation initiatives.
• Maintain records of emissions data and related documentation for at least five years.
• Provide such records to regulators upon request.

Failure to comply with the provisions of the law may result in administrative penalties ranging from AED 50,000 to AED 2 million, depending on the nature of the violation.

Current Regulatory Status and Practical Considerations

At present, detailed implementing regulations, reporting standards and sector-specific methodologies have not yet been issued. In particular:

• The methodologies and standards governing emissions measurement and reporting remain under development.
• The electronic reporting system referenced in the law has not yet been fully operationalised.
• Financial regulators in the UAE free zones, including the DIFC and the DFSA, have not issued specific guidance setting out reporting requirements applicable to regulated firms.

In the absence of detailed implementing regulations and technical reporting standards, the practical implementation of the Climate Change Law remains subject to further clarification by the competent authorities.

In the interim, businesses may wish to review internally how emissions-related information (such as energy consumption or operational emissions data) is currently captured and maintained, in order to facilitate compliance once the relevant reporting framework and methodologies are formally issued.

Callidus is closely monitoring developments and remains in contact with relevant authorities to obtain further clarity on the expected framework and implementation timeline.