Abu Dhabi launches carbon reporting programme to cut emissions

The carbon emissions of large companies are to be tracked and monitored in a key initiative being introduced by the Abu Dhabi Environment Agency (EAD).

The international standard carbon Measurement, Reporting, and Verification (MRV) programme will require all centres that produce large amounts of carbon emissions to submit reports on an annual basis from 2026. To ensure transparency, the environment agency has mandated that the submissions must be verified by a third party.

Dr Shaikha Al Dhaheri, secretary general of EAD, said the programme will support Abu Dhabi's commitment to reduce carbon emissions by 22 per cent by 2027.

In the lead-up to the Cop29 climate talks held last month in Azerbaijan, the UAE was one of the first to release new National Determined Contributions (NDCs), setting a target of reducing emissions by 47 per cent by 2035 compared to the 2019 baseline.

Ahmed Mohammed Al Rumaithi, undersecretary of the Abu Dhabi Department of Energy, highlighted that the MRV systems play a critical role in providing accurate data “to track carbon emissions, ensure transparency, build trust, and drive effective climate action”.

Lowering emissions in hard to abate sectors

Carbon intensive industries such as shipping, aviation, iron and steel, and chemicals and petrochemicals are known as hard to abate sectors because of the difficulty these sectors face in reducing their carbon intensity.

According to the International Renewable Energy Agency, these sectors alone account for approximately one-quarter of the world's energy consumption and about one-fifth of total Co2 emissions.

Abdulnasser bin Kalban, chief executive of Emirates Global Aluminium (EGA), said the initiative will support his organisation to meet “evolving regulatory requirements while maintaining transparency and auditability” of emissions data throughout the value chain.

“This tool is an important step in achieving our bold aspiration of embedding sustainability in everything we do and reaching net zero greenhouse gas emissions by 2050,” said Mr bin Kalban.

Implementing carbon pricing

The EAD said significant strides have been made towards the possibility of implementing carbon pricing mechanisms, which traditionally form the basis for carbon emissions to either be taxed or to be offset via trading in an effort to push toward lower-carbon economies.

Research by the EAD indicates that establishing a domestic carbon pricing system will assist industries in Abu Dhabi with decarbonisation, especially in sectors with high emissions. The MRV programme is designed to enable precise tracking of greenhouse gas emissions, providing the foundation for an effective carbon pricing mechanism.

The strategy aims to generate reliable data that meets global climate requirements like those defined by the United Nations Framework Convention on Climate Change (UNFCCC) and supports the outcomes of the UAE Consensus adopted at Cop28.

Clearing up carbon markets

A major milestone achieved during the Cop29 climate talks in Baku, was the progress made on carbon markets under Article 6 of the Paris Agreement – which had been at a stalemate for close to a decade. The decision out of Azerbaijan means that there is now clarity on how carbon markets will operate under the Paris Agreement, making country to country trading possible.

Article 6 of the 2015 Paris Agreement outlines the framework for countries to engage in voluntary co-operation to achieve climate goals. This provision allows nations to transfer carbon credits earned through emissions reductions to help meet their climate targets, according to the UNFCCC.

Dr Aseel A Takshe, chairwoman of the Department of Public Health at Canadian University Dubai told The National that while the passing of Article 6 is a major milestone with several important implications related to implementation – “its ultimate effectiveness will depend on robust implementation, stringent quality controls, and continued co-operation between governments and the private sector”.

“Many aspects of Article 6 are still being negotiated, with discussions expected to continue through 2026,” said Dr Aseel.

Deutsche Bank Private Bank’s Markus Mueller said that if structured well, carbon trading markets can be part of the solution. “A UN backed market would be fundamental for creating a truly global and efficient market, addressing the issues we have seen with voluntary frameworks over the past 10 years. This would provide, not only governments but also private companies, the needed confidence around the credibility of this market, fostering its growth.”

Research by Morgan Stanley has shown that the voluntary carbon-offsets market is expected to grow from about $2 billion in 2022 to about $100 billion in 2030 and about $250 billion by 2050.

Still, KPMG's Mr Somani said that while there is still work to be done to create greater corporate demand, “a significant uptick in carbon market transactions is expected over the coming years, potentially unlocking a substantial source of climate finance to support both developing and developed countries”.