A new law in the United Arab Emirates forcing companies – including those in the travel sector – to report greenhouse gas emissions went into effect this month.
The UAE is the first country in the Middle East to introduce such a policy, which supports its goal of becoming carbon neutral by 2050.
Under the new law, public and private entities with greenhouse gas emissions of 500,000 tonnes or more must track and report them. Companies with emissions below 500,000 tonnes can volunteer to take part in the emissions reporting and carbon credit trading platform.
The policy is likely to affect airlines operating in the country and large hotel groups.
Emirates, the largest airline in the UAE, emitted 13.3 million tonnes of carbon dioxide in 12 months in 2023, according to RDC Aviation, a firm that calculates emissions using flight data and aircraft fuel consumption.
Emirates said its policy is to commit to growing regulations around emissions.
Although the law took effect in early January, businesses have until the end of May to prepare for it.
Which Greenhouse Gasses Need to Be Reported?
The UAE government website lists the greenhouse gases that companies should report, including the three most common from human activity:
- Carbon dioxide
- Methane
- Nitrous oxide
What This May Mean for Businesses in the UAE
The law requires industries to adjust their operations to meet national emission reduction targets.
The policy encourages measures such as using renewable energy, and carbon capture and storage.
Failure to report emissions after May could result in hefty fines ranging from $13,000 to $550,000.
The policy also includes details of a new national registry for carbon credits, a tool companies can use to offset their emissions.
However, companies must get government approval before buying or using any carbon credits.
The government has not provided details on how the carbon credit registry will work or where the carbon credits will come from.
The UAE has announced plans to buy $450 million in carbon credits from Zimbabwe, Liberia, and Zambia and other countries in Africa with large swaths of forests by 2030.
The new law may also pave the way for a carbon permit system, similar to the European Union’s emissions trading system.
In the EU, governments can cap the total amount of greenhouse gases that can be emitted, issuing a permit for each unit of allowed emissions. Companies that need more permits can purchase them, while those with lower emissions can sell theirs.
Skift’s in-depth reporting on climate issues is made possible through the financial support of Intrepid Travel. This backing allows Skift to bring you high-quality journalism on one of the most important topics facing our planet today. Intrepid is not involved in any decisions made by Skift’s editorial team.
