Scope 3 Emissions Estimator
UAE

Scope 3 emissions reporting in UAE: UAE Net Zero by 2050 Strategic Initiative; UAE National Climate Change Plan 2017-2050; Abu Dhabi Global Market (ADGM) Sustainable Finance Regulatory Framework; Dubai Financial Services Authority (DFSA) ESG disclosure requirements

The UAE was the first Gulf Cooperation Council (GCC) country to announce a net zero target (Net Zero by 2050, announced in 2021) and hosted COP28 in Dubai in December 2023. The UAE's emissions reporting framework is evolving rapidly. There is no single federal GHG reporting mandate equivalent to the EU's CSRD or Australia's ASRS, but multiple regulatory initiatives are converging. ADNOC (Abu Dhabi National Oil Company), the country's largest emitter, voluntarily reports emissions including Scope 3 aligned with the IPIECA/API guidelines. The ADX (Abu Dhabi Securities Exchange) launched ESG disclosure guidance in 2023 requiring listed entities to disclose GHG emissions. The DFM (Dubai Financial Market) has similar ESG reporting requirements. The ADGM (Abu Dhabi Global Market, the financial free zone) published its Sustainable Finance Regulatory Framework referencing ISSB standards. UAE entities that are subsidiaries of CSRD-obligated EU parent companies must provide Scope 3 data for consolidation into the parent's ESRS report. The UAE's economy is diversifying beyond oil and gas into finance, tourism, logistics (Dubai's Jebel Ali is the largest port in the Middle East), and technology, but hydrocarbons still account for approximately 30% of GDP, making Category 11 emissions from fossil fuel exports the dominant Scope 3 issue.

Regulatory context: Ministry of Climate Change and Environment (MOCCAE); Securities and Commodities Authority (SCA); Abu Dhabi Securities Exchange (ADX) and Dubai Financial Market (DFM) for listed entity disclosure

MOCCAE (Ministry of Climate Change and Environment) oversees the UAE's climate policy, including the National Climate Change Plan 2017-2050 and the updated NDC (Nationally Determined Contribution) submitted under the Paris Agreement. The UAE's NDC targets a 31% reduction in GHG emissions by 2030 relative to business as usual. The SCA (Securities and Commodities Authority) regulates listed entities on the ADX and DFM and has issued ESG disclosure guidelines that include GHG reporting recommendations. The ADGM's Financial Services Regulatory Authority (FSRA) published Guidance on Sustainability-related Disclosures requiring ADGM-regulated entities to make climate disclosures aligned with ISSB S2 from 2025. The DFSA (Dubai Financial Services Authority) in the Dubai International Financial Centre (DIFC) has also published ESG-related disclosure expectations. The UAE does not currently have a carbon tax or emissions trading scheme, though the UAE Climate Change Strategy references carbon pricing as a potential future instrument. The Environment Agency Abu Dhabi (EAD) monitors environmental performance for Abu Dhabi emirate, and the Dubai Municipality oversees environmental regulation in Dubai. This fragmented regulatory structure means that UAE entities must comply with emirate-level, federal, and financial free zone requirements, each with different timelines and specificity regarding Scope 3.

Practical guidance for UAE

UAE entities estimating Scope 3 face a shortage of locally published emission factors compared to European countries. There is no UAE equivalent of DEFRA or ADEME. Entities should use the IPCC 2006 Guidelines default emission factors as the baseline, supplemented by sector-specific sources. For electricity, the UAE's grid emission factor is approximately 0.42 kg CO2e per kWh (based on the gas-dominated generation mix, with growing solar contribution). Abu Dhabi's EWEC (Emirates Water and Electricity Company) and Dubai's DEWA (Dubai Electricity and Water Authority) publish generation mix data. DEWA's grid emission factor is approximately 0.36 kg CO2e per kWh, lower than the national average, reflecting Dubai's investment in the Mohammed bin Rashid Al Maktoum Solar Park (target capacity of 5 GW by 2030). For Category 11, UAE oil and gas entities (ADNOC, its subsidiaries, and service companies) face the same Scope 3 challenge as other fossil fuel producers: combustion of exported crude oil, refined products, and LNG generates Category 11 emissions that dwarf operational Scope 1 and Scope 2. For Category 4, the UAE's role as a global logistics hub (Emirates SkyCargo, DP World, Jebel Ali Free Zone) makes transport emissions material. For Category 6, the UAE's position as a regional business hub with extensive international air connectivity produces significant business travel emissions.

Audit expectations

UAE audit firms performing sustainability assurance follow ISAE 3000 (Revised) and ISAE 3410. The major international networks (Big Four and mid-tier) operate in the UAE and are building sustainability assurance capabilities. The ADGM's FSRA and the DFSA expect assurance over climate disclosures for entities within their regulatory perimeters. Assurance providers in the UAE focus on the source and vintage of emission factors used (given the absence of a national emission factor database), the organisational boundary for entities with complex free zone and mainland structures, and the completeness of Category 11 for oil and gas entities. For UAE financial institutions, assurance providers examine Category 15 methodology, noting that the UAE's banking sector includes both conventional and Islamic (Sharia-compliant) banks, and the PCAF methodology applies equally to both. UAE assurance practitioners are alert to the reputational sensitivity of Scope 3 disclosures for oil-producing entities, and expect management to present the figures without offsetting them against carbon capture, utilisation, and storage (CCUS) projects unless those projects have verified, independently audited capture volumes.

UAE-specific considerations

The UAE's desert climate creates specific emission factor considerations. Air conditioning accounts for approximately 60% to 70% of building electricity consumption (per the Dubai Supreme Council of Energy), making Category 8 (upstream leased assets) and Category 13 (downstream leased assets) particularly sensitive to the electricity emission factor. Refrigerant leakage from air conditioning systems (HFC-based refrigerants with high global warming potentials) should be captured in Scope 1 for owned buildings or Category 8 for leased premises. The UAE's desalination plants (which produce most of the country's potable water) are energy-intensive, and the embedded carbon in potable water supply should be considered for Category 1 where water consumption is significant. DEWA publishes the carbon intensity of Dubai's water supply (approximately 8 kg CO2e per cubic metre). The UAE's Barakah Nuclear Energy Plant (four APR-1400 units, with three operational by 2024) is progressively reducing Abu Dhabi's grid emission factor. As all four units reach full capacity, the Abu Dhabi grid emission factor will fall substantially from the current gas-dominated baseline. UAE entities should monitor EWEC publications for updated factors. The UAE's free zone structure (JAFZA, DAFZA, ADGM, DIFC, and over 40 others) creates organisational boundary complexities for Scope 3, as entities may operate across multiple free zones and mainland jurisdictions within a single corporate group.

Common inspection findings

The ADX's 2024 review of ESG disclosures by listed entities found that fewer than 20% of ADX-listed companies disclosed any Scope 3 data, and those that did typically reported only Category 6 (business travel) without addressing upstream procurement or downstream product use.

ADGM's FSRA found that financial institutions in the Abu Dhabi financial free zone disclosed carbon footprint data using generic global emission factors rather than UAE-specific grid and fuel factors, producing estimates that did not reflect local conditions.

UAE assurance providers noted that oil and gas entities that reported Scope 3 frequently presented net figures (after deducting CCUS and reforestation project credits) rather than the gross figures required by GHG Protocol, making the disclosures non-compliant with ESRS E1-7 for entities reporting into EU parent group reports.

The DFSA's review of DIFC-registered entities found that asset managers disclosed financed emissions using incomplete portfolio coverage (often covering only listed equity and corporate bond holdings while excluding private equity, real estate, and sovereign bonds).

Dubai Municipality's environmental compliance inspections identified that some industrial entities in Dubai reported lower Scope 1 emissions for environmental permit purposes than appeared in their voluntary sustainability disclosures, creating data integrity concerns that affect downstream Scope 3 calculations.