Does the UAE Climate Law Apply in Free Zones, DIFC and ADGM?

A practitioner decision guide for free-zone entities that need a precise answer beyond the unsafe shortcuts “federal law does not apply here” or “every free-zone company must file the same report”.

The starting point is direct. Article 3 says that the Decree-Law applies to emission Sources in the State, including free zones. A Source is defined broadly as a public or private legal person, or an individual enterprise, whose operations or activities release greenhouse gases. The law therefore does not invite an entity to stop the analysis because its licence was issued by a free zone.

The next step is not to assume that every free-zone company has identical MRV duties. Article 6 is framed for Sources determined by MOCCAE and the competent authority, in coordination with the entity concerned. The exact reporting route may also be affected by Cabinet Resolution No. 67 of 2024, an emirate facility-MRV scheme, an environmental permit, a sector rule or an instruction channelled through the free-zone or licensing authority.

Figure 1. Free-zone applicability requires three linked enquiries: the federal Article 6 route, the emirate or facility route, and the free-zone/licence coordination route.

1. Which legal person is the potential Source?

Identify the UAE legal entity, branch or establishment that carries out the emitting activity. A holding company, an operating subsidiary and a branch may have different licences, assets, contracts and source systems. A group sustainability report may consolidate them, but a regulator may address an entity or facility under a different boundary. Record the legal name, licence number, registered address, operating address, ownership and responsible signatory.

2. Where are the emitting facilities and who controls the activity?

A financial-free-zone entity may have little direct operational activity at its registered office while owning or financing operations elsewhere. Conversely, a free-zone industrial company may operate combustion, process or refrigeration equipment on site. The analysis should identify the physical location, operating emirate, permit holder, operator, meter responsibility, fuel purchaser, landlord arrangements and outsourced activities. Do not infer the facility boundary from the registered office alone.

3. Which federal, registry or local trigger applies?

Test the federal Climate Law scope and any Article 6 determination. Separately test Cabinet Resolution No. 67 of 2024, which applies in financial and non-financial free zones and uses an annual Scope 1 and Scope 2 threshold of at least 0.5 million tCO2e for mandatory registration by an entity of huge carbon emissions. Then test any emirate, facility, sector, permit or free-zone reporting rule. These tests can overlap, but they are not interchangeable.

4. Which body provides the authoritative reporting route?

The free-zone authority may hold the licence and entity data, but it is not automatically the body that sets the climate methodology or verifies emissions. The relevant competent authority may be an emirate climate or environmental body. MOCCAE retains federal roles. The correct answer may involve coordination between them. Obtain a written response that identifies the governing instrument, entity or facility, reporting route, method, form, period, deadline and verification expectation.

Figure 2. A reliable conclusion combines legal-entity facts, physical facility and emissions-source facts, and the current authority instruction.

DIFC is a financial free zone in Dubai. The federal Climate Law’s express free-zone wording means that a DIFC entity should not treat its financial-free-zone status as an exemption. Dubai Law No. 11 of 2024 establishes the Dubai Environment and Climate Change Authority and describes its climate and environmental remit across the Emirate, including special development zones and free zones such as DIFC.

That does not mean that every DIFC entity has a DECCA filing obligation in the same form and period. The entity should distinguish its registered office from any operational facilities, test Article 6 designation and other applicable instruments, and ask whether DECCA, MOCCAE, the DIFC Authority or another body is the correct point for the particular question. A financial services office with limited direct emissions presents different facts from a DIFC entity that operates data centres, vehicle fleets or assets through controlled UAE operations.

ADGM is a financial free zone in Abu Dhabi. As with other free zones, the federal law’s express reach means that ADGM status is not a blanket exemption. The Environment Agency - Abu Dhabi’s facility-MRV guidance states that its Abu Dhabi facility regime applies across the emirate, including free zones, and its 2026 implementation materials describe EAD as the Abu Dhabi single point for covered facility reporting.

The critical word is facility. A holding, investment or professional-services entity registered in ADGM may not itself operate a covered industrial or transport facility. A group may nevertheless control or own operating entities and assets elsewhere. Whether the EAD facility scheme applies depends on the current guidance, covered sector, facility-level direct-emissions test, operator facts and any authority instruction. The legal entity should therefore avoid both extremes: “ADGM is exempt” and “every ADGM entity must file the EAD facility report”.

A regulator question should be specific enough to receive a usable answer. Attach or summarise the facts and state the proposed conclusion without presenting it as settled. Ask the authority to confirm or correct the conclusion and identify any additional registration, reporting or verification steps.

A written confirmation request should identify the legal entity and facility, emitting activity, designation evidence, relevant route or threshold, proposed boundary, portal, form, method, period, deadline and verification question. Send the fact pack to the relevant climate or environmental authority, coordinate with the free-zone or licensing authority where necessary, and retain the structured response in the authority register.