The United Arab Emirates (UAE) has emerged as a regional climate leader, setting ambitious decarbonization targets and pledging to reach net-zero emissions by 2050. As the first country in the Middle East to make such a commitment, the UAE is backing its commitments with concrete action, including large-scale investments in clean energy, industrial decarbonization, and sustainable finance. In November 2024, the UAE raised its ambitions once again, targeting a 47% reduction in emissions by 2035, relative to 2019 levels—its most far-reaching target yet.
The UAE’s New Emission Reduction Targets – A glimpse into the future:
The Paris Agreement, adopted in 2015, is a global pact to limit warming well below 2°C, with countries submitting Nationally Determined Contributions (NDCs) outlining their climate commitments. In November 2024, the UAE released its third NDC, marking a significant shift from its previous submission. This new NDC provides detailed, ambitious sector-specific targets for emission reductions by 2035, including a bold 79% reduction target for the building sector. This enhanced ambition signals a transformational shift that will shape policies, industries, and investments across the UAE.
Building Sector Spotlight: 79% Emissions Reduction by 2035
The UAE's updated NDC sets a bold target for the building sector—a 79% absolute emissions reduction from 2019 levels by 2035. Given that this sector accounts for 60% of total national emission reductions, achieving this goal will require transformative action.
What Does 79% Mean in Practice?
A portion of these reductions will come from the decarbonization of the water and power sectors. Reducing the emission intensity of water and power will lessen the effect they have on building emissions over the lifetime of operation of a building. However, even if those sectors achieve their aspirational 50% emissions intensity reduction by 2035, the building sector will still need deep efficiency measures to bridge the rest of the gap. This challenge is further compounded by new developments adding to the sector’s footprint since the 2019 baseline—meaning that any underperforming buildings today will likely require upgrades to stay aligned with national targets.
Energy Efficiency is the Key Reduction Lever
The UAE’s building sector target focuses primarily on reducing operational emissions, which stem primarily from fuel, electricity, and cooling consumption. Given this focus, the key to achieving the 79% reduction goal is minimizing energy consumption through energy efficiency, electrification, and on-site renewable energy deployment. Measures—such as high-performance insulation, advanced HVAC systems, smart building management systems, and rooftop solar PV—can significantly lower energy demand, while electrification, including the transition from fossil-fuel-based systems to electric alternatives, will further cut emissions, especially as the grid decarbonizes.
Clean New Builds vs. Low-Emission Retrofits
The lowest-hanging fruit is ensuring that all new developments are designed for low emissions from the outset. This is not only more cost-effective than retrofitting but also provides long-term benefits, such as higher property values and lower utility costs. However, given that the majority of 2035’s building stock already exists, the real challenge will be retrofitting and electrifying existing buildings at scale.
Meeting this ambitious target will require widespread adoption of energy efficiency upgrades, electrification, and performance monitoring, positioning the UAE’s built environment as a global leader in sustainable urban development.
From Targets to Implementation: Current and Upcoming Legislation
Achieving these ambitious targets within a decade represents a significant challenge, underscoring the critical role of regulation in providing both incentives and penalties to ensure sector-wide alignment with the targets.
Federal Decree-Law No. 11 of 2024 on the Reduction of Climate Change Effects
Effective climate action begins with accurate measurement. In November 2024, the UAE introduced Federal Decree-Law No. 11 of 2024 on the Reduction of Climate Change Effects, a landmark climate law set to take effect on May 30, 2025. This decree mandates that local authorities—including municipalities, free zones, and other regulatory bodies—develop and implement climate mitigation and adaptation plans. These plans must identify climate risks and opportunities, applying to all emission sources across public, private, and individual enterprises starting August 30, 2025.
Strengthened GHG Monitoring, Reporting, and Verification (MRV)
A key pillar of the law is mandatory greenhouse gas (GHG) monitoring, reporting, and verification (MRV). Under Article 6, businesses will be required to comply with national MRV provisions within one year from the law’s enforcement. While this timeframe may be extended, compliance could be required as early as Q4 2025.
Strict penalties for non-compliance will be enforced, ranging from AED 50,000 to AED 2,000,000. Repeated violations within two years will result in doubled fines.
A Foundation for Future Climate Policy
While no further policies have been officially announced, this law is expected to lay the groundwork for additional climate measures, potentially including carbon pricing mechanisms, emissions caps, and sector-specific incentives or penalties aligned with the UAE’s national decarbonization targets.
Building Sector Decarbonization Policies
The UAE and its individual emirates have already begun rolling out building sector legislation, though these measures alone are not sufficient to achieve the ambitious decarbonization targets. While future policies remain uncertain, the UAE has indicated that it is developing a roadmap to reach net-zero emissions in the buildings and construction sector by 2050, covering all seven emirates . This roadmap, which will follow the methodology of the Global ABC Roadmap for Buildings and Construction 2020-2050, will assess key activities such as urban planning, new and existing buildings, building operations, appliances, materials, resilience, and clean energy. The roadmap is set to be completed by 2027. While the precise policies remain to be seen, the Global ABC highlights several cost-effective policy measures for building decarbonization, including:
- Carbon pricing
- Energy efficiency obligations
- Building energy codes
- Renovation targets
- Performance certificates
- Market interventions
- Grants
These are likely to serve as critical levers, offering both incentives and penalties, to drive sector-wide change in the years ahead.
How Can Building Sector Actors Prepare?
To proactively align with national decarbonization targets, building sector stakeholders should focus on incorporating sustainable practices in both new constructions and existing buildings. The first essential step is to understand current emissions by establishing a baseline, which will facilitate strategic emission reductions and ensure compliance with Federal Decree-Law No. 11 of 2024 on the Reduction of Climate Change Effects.
In conclusion, the UAE's ambitious climate targets, supported by robust regulations and transformative projects, are positioning the country as a regional leader in sustainable development and decarbonization. As these changes unfold, businesses must act now to align their strategies with evolving regulations and decarbonization goals to stay ahead of the curve.
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