From Emissions Reporting to Carbon Capture: UAE’s Climate Compliance Framework for Oil and Gas
Over the past two years, the UAE has built a substantive legal and institutional framework to respond to climate change, enacting new legislation and establishing or reforming the regulatory authorities. More recently, in May 2026, Abu Dhabi introduced an important additional component – a model of how one of the main climate mitigation mechanisms, carbon capture, use and storage (“CCUS“), will operate in practice. Together, these developments show that UAE is moving from the creation of climate-related obligations to the development of practical mechanisms for their implementation.
UAE’s Climate Compliance Framework
Climate compliance in the UAE is primarily governed by two federal-level laws: the first is Federal Decree-Law No. (11) of 2024 On the Reduction of Climate Change Effects (the “Climate Change Law”). The second is Cabinet Resolution No. (67) of 2024 Concerning the National Register for Carbon Credits (the “NRCC Resolution”). Together they outline who has to measure and report emissions, what the mitigation options are and how carbon credits are created and registered.
This legal framework sits within a wider institutional structure. At the federal level, the Ministry of Climate Change and Environment is the principal authority for environmental protection and climate policy. Each Emirate then has its own competent bodies for climate and environmental matters. In Abu Dhabi, this includes Department of Energy and the Environment Agency – Abu Dhabi. In Dubai, it is the Dubai Environment and Climate Change Authority, alongside Dubai Municipality for matters not yet transferred to the Authority. Sharjah, Ras Al Khaimah and Fujairah each have their own dedicated environment authorities as well. Thus, oil and gas companies operating across more than one Emirate will typically need to interact with more than one of these bodies.
Under NRCC Resolution, large emitters whose emissions equal or exceed 0.5 million tonnes of CO₂ equivalent annually in the UAE must report and verify their emissions and register in the National Register for Carbon Credits, while smaller entities may register on a voluntary basis. The NRCC Resolution also requires monitoring, reporting and verification (“MRV”). The Climate Change Law takes a broader approach: article 6 establishes the basic MRV framework for selected “sources”, but the practical scope of article 6 will depend on which sources are determined by the Ministry and competent authorities. The law also lists the main mitigation measures, including energy efficiency, clean energy, natural carbon sinks, CCUS, carbon offsetting and others the authorities may later specify. Until recently, the federal framework identified the mitigation options but left much of the operational detail to further instruments. Abu Dhabi’s new CCUS policy is important because it begins to answer that question for one of the main mitigation measures.
CCUS in the Oil and Gas Sector
CCUS includes technologies used to capture CO₂, transport it and either use it or store it permanently. The CO₂ may come from large emission points, such as power stations, gas-processing plants and industrial facilities or it may be captured directly from the air. After capture, it is usually compressed and transported by pipeline, ship, truck or rail. Where the CO₂ is not used, it is generally injected into deep underground formations, such as depleted oil and gas reservoirs or saline aquifers, for permanent storage.
The NRCC Resolution recognises CCUS as one of the main routes through which carbon credit certificates can be obtained. Additionally, UAE’s Nationally Determined Contribution treats CCUS as a material decarbonisation tool, particularly for hard-to-abate industries and for the oil and gas sector itself. Oil and gas operations are both a source of the CO₂, and the main commercial user of it, principally through enhanced oil or gas recovery (“EOR/EGR”), where captured CO₂ is injected into a field to extract more oil or gas. Outside EOR, the captured CO₂ often has limited value as a standalone commodity.
Abu Dhabi’s CCUS Policy
In May 2026, the Abu Dhabi Department of Energy released the General Policy on Carbon Capture in the Emirate of Abu Dhabi on its website. It is the first document to set out, in practical terms, how the CCUS value chain in the UAE is to be organised: who the key players are, how CO₂ physically and legally moves between them and where liability sits at each stage.
At a high level, the structure is the following: an emitter generates CO₂, supplier captures it and the captured CO₂ then moves through a shared pipeline network (the hub) run by a Transport System Operator. From there, it ends up in one of two places: injected permanently into geological storage or delivered to a purchaser who uses it, most commonly for EOR.
The policy is built around a hub model. A CCUS hub receives CO₂ from multiple suppliers or emitters and provides transport and storage through shared infrastructure. The policy draws distinction between the source and the supplier. A source is the entity responsible for capturing CO₂ from its own facilities, or for engaging a third party to do so. A supplier is broader: it may be the entity that captures the CO₂ or another entity that supplies CO₂ captured from other sources. In practice these will often be the same company, but they do not have to be: a facility could arrange for a third party to capture and supply CO₂ on its behalf. What matters is the supplier’s role, because the policy treats the connecting pipeline between the supplier and the hub as the supplier’s own facility and makes the supplier responsible for legal, operational and environmental liability up to the point the CO₂ crosses into the hub.
That crossing point (the delivery point) is where responsibility begins to shift from the supplier to the next part of the chain. Once CO₂ is inside the hub, the Transport System Operator is responsible for the shared infrastructure: the pipelines, compressors and any intermediate storage. It carries transport-related liability, including liability for CO₂ leakage within its transport facilities. From the hub, the CO₂ goes one of two ways. If it is going into permanent storage, that is a separate domain run by a Storage Operator under a concession granted by the Supreme Council for Financial and Economic Affairs (“SCFEA”); the Storage Operator carries its own long-term monitoring and leak liability. If it is going to a purchaser instead, e.g. for industrial use or EOR, the liability follows the commercial arrangement between the Transport System Operator and that purchaser.
The policy also allows for direct, bilateral supply arrangements outside the hub, where a supplier and a purchaser deal with each other directly rather than through the shared network. In that case, responsibility follows the agreement between the two parties, rather than the hub’s allocation of liability.
The Governance Structure
The Abu Dhabi policy sets out a three-tier governance structure, illustrated below.
Governance and operator structure under Abu Dhabi CCUS policy
The Executive Council designates Competent Authority by resolution, in coordination with SCFEA. After that designation, the policy gives continuing approval and implementation roles to SCFEA and the Competent Authority.
SCFEA is the principal approval body under the policy. It approves the procedures and licensing framework, the tariff methodology, the appointment or designation of the Transport System Operator and the concessions for geological storage. In practical terms, the main structural elements of the CCUS framework require SCFEA approval.
The Competent Authority carries the implementing and regulatory role. This includes licensing, approving hub sites, setting or approving connection standards, monitoring compliance and administering the certification scheme. Its role is important, but it is not the concession-granting authority. For matters such as geological storage concessions, it reviews and recommends, with final approval resting with SCFEA.
At the operator level, the Transport System Operator is responsible for developing and operating the shared hub network and must have at least 51% Abu Dhabi Government ownership. The Storage Operator is responsible for underground storage under a concession granted by SCFEA. The two roles are therefore connected, but not identical: SCFEA approves the Transport System Operator and grants storage concessions, while the Competent Authority approves the Transport System Operator’s licence conditions.
ADNOC has a specific consent role where CCUS activities fall within or affect ADNOC concession areas. In those cases, its written approval or no-objection may be required. Other bodies also remain relevant: the Petroleum and Natural Resources Affairs Office review the policy and may propose amendments. The Department of Municipalities and Transport and Environment Agency – Abu Dhabi are relevant for land-use, public-corridor and environmental requirements.
Practical Implications
For oil and gas sector, the Abu Dhabi policy matters because it shows where the main issues in a CCUS project are likely to arise, even though the detailed rules are still yet to come. For now, companies should focus on two points:
First, identify their likely role in the value chain: Source, Supplier, Transport System Operator, Storage Operator or Purchaser. That role will determine the approvals, liability and commercial terms that may apply.
Second, understand where responsibility will transfer. The delivery point between the Supplier and the hub, and the later hand-off to a Purchaser or Storage Operator, will be central to liability.
That said, a policy is not a fully operational regime. Several important details remain to be worked out, including the licensing conditions and connection standards the Competent Authority will set, the tariff framework SCFEA will apply to hub access and the interaction between hub participation and eligibility for carbon credits under the NRCC Resolution. Companies generating or planning to generate carbon credits through CCUS activity should monitor closely how these frameworks are reconciled in practice.
Abu Dhabi’s Policy may also influence how CCUS is approached elsewhere in the UAE. The Climate Change Law is federal, but implementation will still need to work through each Emirate’s own authorities, environmental approvals and sector-specific structures.
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Baqar Palavandishvili Senior Associate baqar@galadarilaw.com |