Introduction
The UAE’s efforts in carbon emissions trading form an integral part of its drive to achieve climate neutrality by 2050, through the development of dedicated regulatory frameworks and specialized markets for carbon credits. In recent years, this has included the launch of federal initiatives and legislation to regulate the national carbon registry, recognize carbon credits as tradable financial instruments, and establish pilot trading platforms in cooperation with regulatory authorities and financial markets. The key regulatory and policy initiatives related to carbon emissions trading in the UAE include:
In 2018, the CMA proposed the establishment of markets/platforms for carbon emissions trading and issued a press release expressing its intention to create a carbon trading market. In 2023, the Ministry of Climate Change launched the Carbon Trading Project as a transformational initiative, bringing together a working group from all relevant entities, including the Capital Market Authority (CMA). This work led to the drafting of Cabinet Resolution No. (67) of 2024 regulating the National Carbon Registry, which formally classifies carbon credits as tradable financial instruments.
In parallel, the CMA issued a draft regulation for operators of carbon credit trading platforms, setting out the necessary conditions, requirements, and ongoing obligations for entities wishing to operate such platforms. Furthermore, in late 2023, the Dubai Financial Market, in coordination with the CMA, launched a pilot platform for carbon credit trading during the 28th Conference of the Parties to the UN Framework Convention on Climate Change (COP28). This step further strengthens the role of financial markets in supporting the UAE Government’s goal of achieving climate neutrality by 2050.