The Regulatory Landscape Has Shifted
For businesses operating in the UAE, sustainability reporting has moved from voluntary aspiration to legal requirement. Federal Decree-Law No. 11 of 2024 on the Reduction of Climate Change Effects came into force on 30 May 2025, mandating all UAE businesses — public and private, including those in free zones — to measure, report, and actively reduce their greenhouse gas (GHG) emissions.
The penalties for non-compliance are substantial, ranging from AED 50,000 to AED 2,000,000, with doubled fines for repeated violations within two years. This is no longer a matter of corporate social responsibility. It is a legal obligation with real financial consequences.
What the Law Requires
Under the new climate law, businesses must undertake several compliance measures. They are required to quantify their GHG emissions across operations, implement strategies to reduce those emissions in line with national and sector-based targets, and submit emissions data as part of national climate inventories.
Simultaneously, the Securities and Commodities Authority (SCA) has mandated annual sustainability reports for all listed companies on the Dubai Financial Market (DFM) and Abu Dhabi Securities Exchange (ADX). The Abu Dhabi Global Market (ADGM) has enacted its own ESG Disclosures Framework, requiring qualifying entities to report on environmental, social, and governance factors using globally recognised standards.
For businesses across the MENA region, similar frameworks are emerging. The Muscat Stock Exchange now requires ESG reports aligned with GRI and GCC metrics. Jordan has mandated ISSB-aligned climate disclosures for its top listed companies. Qatar has proposed ISSB-aligned reporting beginning in 2026.
Where Biodiesel Creates Immediate Impact
For companies seeking practical, immediate ways to reduce reported emissions, switching to biodiesel represents one of the most accessible and impactful options available. Unlike many decarbonisation strategies that require significant capital investment and long implementation timelines, biodiesel can be deployed in existing diesel engines without modification.
The emissions reduction is measurable and significant. Biodiesel produced from used cooking oil (UCO) reduces lifecycle greenhouse gas emissions by up to 86% compared to conventional fossil diesel. For a logistics company, construction firm, or hospitality group reporting Scope 1 emissions, transitioning fleet vehicles to biodiesel blends delivers quantifiable carbon reduction that can be documented in sustainability reports.
Neutral Fuels provides green certificates to all UCO collection partners and biodiesel customers, documenting the precise volume of CO2e avoided. These certificates serve as auditable evidence for ESG reports, investor disclosures, and regulatory submissions.
Scope 1, 2, and 3: Understanding Your Emissions Profile
The UAE climate law and international ESG frameworks require businesses to understand and report emissions across multiple scopes. Scope 1 covers direct emissions from owned or controlled sources, such as company vehicles and on-site generators. This is where biodiesel has the most immediate impact — every litre of fossil diesel replaced with B100 biodiesel eliminates up to 86% of the associated carbon emissions.
Scope 3 emissions — those occurring in a company’s value chain — are increasingly scrutinised by investors and regulators. For food service businesses, partnering with a certified UCO collector like Neutral Fuels can contribute to Scope 3 reductions by diverting waste from landfill and converting it into low-carbon fuel.
Preparing for What Comes Next
The trajectory of ESG regulation in the UAE and broader MENA region is clear: requirements will broaden and deepen. Companies that build compliance infrastructure now — establishing emissions baselines, implementing reduction strategies, and documenting their sustainability initiatives — will be well-positioned as standards tighten.
For businesses generating used cooking oil, establishing a UCO collection partnership creates a dual benefit: proper waste management compliance and documented contribution to the circular economy. For those operating diesel fleets, transitioning to biodiesel blends provides immediate, measurable emissions reduction with minimal operational disruption.
Contact Neutral Fuels to discuss how biodiesel and UCO recycling can support your ESG compliance strategy.
