Policies & action
We rate the United Arab Emirates’ policies and actions as “Insufficient”. The “Insufficient” rating indicates that the United Arab Emirates’ policies and action need substantial improvements to be consistent with the Paris Agreement’s 1.5°C temperature limit. If all countries were to follow the UAE’s approach, warming would reach over 2°C and up to 3°C.
Despite the development of large renewable and nuclear energy projects, the UAE’s emissions are expected to increase to 2030 due to a continued expansion of fossil fuel-based sources of electricity. In line with its energy strategy, which projects coal reaching a 12% share of total electricity generation in 2050, in May 2020 the UAE completed the first unit of its inaugural 2.4 GW coal-fired power plant. The construction of new coal-fired generation is inconsistent with the need to phase out coal from electricity production in the Middle East by 2034 in order to limit warming to 1.5°C.
Note: the assessment below has not been updated and shows the status of the last update (27 November 2020).
Before the COVID-19 pandemic, the CAT estimated that the UAE’s greenhouse gas emissions would reach 286–310 MtCO2e excluding LULUCF in 2030, which is approximately a 46–58% increase compared to 2010 levels.
The CAT estimates that UAE’s 2030 emissions could decline by around 10–16% below our current policy projections when taking into account the potential impact of COVID-19.
The COVID-19 pandemic’s impact on emissions in the UAE remains subject to high uncertainty. The pandemic’s impact will critically depend on the government’s response to the public health crisis, ongoing economic developments, and the implemented recovery measures. The CAT estimates a 6–9% drop in emissions in 2020 below 2019 levels due to a drastic slowdown of domestic economic activity and international trade. The UAE will reduce oil production in Q4 2020 and Q1 2021 as part of an agreement by OPEC+ made against the backdrop of lower global oil consumption (El Gamal & Nasralla, 2020). In this context, the Abu Dhabi National Oil Company (ADNOC) announced a supply reduction of 25% by November 2020 (OGV Energy, 2020). Longer-term economic consequences in consumption and production patterns remain to be seen.
As of November 2020, the government has announced various fiscal measures in response to the COVID-19 pandemic (IMF, 2020a; O’Callaghan et al., 2020), amounting to about AED 32 billion (USD 8.7 billion), as well as monetary measures, including among others:
- Private sector support of AED 16 billion (USD 4.4 billion), including lowering electricity bills by 20% for certain consumers in the commercial and industrial sectors between April and June 2020 (Emirates News Agency, 2020c), with an extension of these measures announced until the end of 2020 (Dadlani, 2020)
- A nation-wide stimulus plan by the central bank of AED 50 billion (USD 13.6 billion) was extended in November 2020, and will facilitate the provision of zero-interest loans to firms (Babu Das, 2020)
- Sub-national support packages, such as the “Ghadan-21” fiscal stimulus program in Abu Dhabi worth AED 9 billion (USD 2.5 billion), consisting of 15 stimulus measures such as water and electricity subsidies for citizens, and credit guarantees and liquidity support to small and medium-sized enterprises (Gulf News, 2020)
These initial economic rescue and recovery measures do not explicitly incorporate domestic and international proposals for a ‘green’ and low-carbon economic recovery (Climate Action Tracker, 2020; Dubai Future Foundation, 2020; IEA/IMF, 2020). Investments in low-carbon technologies would enable substantial opportunities for a ‘green’ stimulus, value chain localisation, job creation, and local air pollutant reduction. It remains to be seen whether the UAE government will align further fiscal spending with a transition to a low-carbon economy.
Increasing energy efficiency became a key national strategy to reduce local energy consumption, after the UAE became a net importer of natural gas in 2008. With electricity and desalinated water generation dependent on natural gas, the rapidly growing population tipped the balance, with domestic gas consumption exceeding production that year (Ministry of Energy, 2012). In addition, the traditionally subsidised energy and water prices led to a culture of wasteful energy usage, which would further render the UAE economy increasingly reliant on gas imports in the future.
In 2017, the UAE announced the Energy Strategy for 2050, a plan which aims at diversifying the energy mix and improving energy efficiency (WAM, 2017). The strategy foresees shares of 44% renewable energy, 38% gas, 12% “clean coal” and 6% nuclear in the electricity mix in 2050. According to projections from the Department of Energy and the Dubai Electricity and Water Authority, the contribution of renewables in primary energy will increase. However, they also expect a continued increase in gas consumption (Trichakis et al., 2018).
In May 2020, the construction of the first unit of the 2.4 GW ultra-supercritical Hassyan power plant was completed (SASAC, 2020). The plant is UAE’s first coal-fired power plant, expected to be fully completed by 2023 (Power Technology, 2017). The UAE is also considering the development of another 1.8 GW coal plant (IEA Clean Coal Centre, 2019). The development of coal in the UAE is inconsistent with the Paris Agreement. To keep the window open for a 1.5°C-consistent GHG emission pathway, no new coal-fired power plants should be built (Kuramochi et al., 2017). In Paris Agreement compatible pathways for the Middle East and Africa region, coal power generation would need to be reduced by 80% in 2030 compared to 2010 levels, leading to a phase-out by 2034 (Yanguas Parra et al., 2019).
In a further effort to diversify the electricity mix, 5.6 GW of nuclear power capacity will come online by around 2021 and several GW of solar power will be installed by 2030 (Masdar Institute/IRENA, 2015). The UAE connected the first of four 1.4 GW nuclear reactors of the larger 5.6 GW Barakah nuclear power plant to the power grid in August 2020 (Emirates News Agency, 2020a). A South Korean consortium has been awarded the contract to build the nuclear power plants and a framework for competitive tendering of solar power plants in the UAE is in place (Masdar Institute/IRENA, 2015).
In June 2019 the 1.2 GW Noor solar PV plant came online in Abu Dhabi. At the time of completion it was the world’s largest single-site solar power plant (Gulf News, 2019a). A further 1.5 GW solar power tender opened in July 2019 in Abu Dhabi, with expected completion in 2022 (Bellini, 2020).
The Emirate of Dubai has also launched its own large-scale solar PV project: the Mohammed bin Rashid Al Maktoum Solar Park launched in 2012 should reach 5 GW of solar PV and CSP by 2030. The fifth tender round (900 MW) of this solar park, completed in October 2019, raised the total tendered capacity to nearly 2.9 GW (Gulf Today, 2019). DEWA, Dubai’s electric utility, has signed a power purchase agreement (PPA) for this 900 MW phase with commercial operation expected in Q2 2021 (Emirates News Agency, 2020b). Construction of a third phase of the solar project (800 MW) was completed in the first half of 2020 (Davids, 2020), but it is unclear whether it has been connected to the grid.
In addition to these solar power projects, a contract for the UAE’s first pumped storage hydroelectric plant, with an expected capacity of 250 MW, was awarded in August 2019 (Gulf News, 2019b).
The Energy Strategy for 2050 does not adequately explain its target of improving energy efficiency by 40% (e.g. how efficiency is defined and what the reference is). Considering only the targets for the electricity mix, we find that the Energy Strategy does not lead to additional emissions reductions in comparison to currently implemented policies. The reason for this is that the scenario which forms the basis for our current policy projections assumes a high share of (low-carbon) nuclear electricity by 2030 (19%). The Energy Strategy results in a lower share of nuclear energy (3% in 2030 assuming a linear development towards the 2050 target), and higher shares of oil and coal (assuming no CCS). For further information, please see the Assumptions section.
In August 2015, the UAE decided to deregulate energy prices by phasing out subsidies for gasoline and diesel. The subsidies had become a burden to national budgets and the UAE made use of low global energy prices to minimise the immediate impact on consumers (Bloomberg, 2015; Ministry of Energy, 2015b).
Our projections, including estimates of the impact based on Merrill, Bassi, Bridle, & Christensen (2015), show that the phase-out of fossil fuel subsidies is an important element for decreasing emissions in the short term. Since January 2018, the Federal Decree Law No. 8 establishes that fuel prices are subject to VAT (Ministry of Finance, 2017), introduced to compensate for the fiscal deficits caused by years of low oil prices (Financial Times, 2018). Petrol and diesel prices are subject to a 5% VAT rate, whereas crude oil and natural gas are still tax exempt. However, in the medium term, the UAE must implement additional measures to ensure a more rapid shift to low-carbon alternatives. To put the world onto a 1.5°C-consistent GHG emissions pathway, the last fossil fuel passenger car globally should be sold by 2035-2050 worldwide (Kuramochi et al., 2017).
A vehicle fuel economy standard based on the Corporate Average Fuel Economy (CAFE) standard has been proposed. A technical study mentioned in the Fourth National Communication estimates the mitigation potential of the standard to be up to 5.4 MtCO2 in 2025 and 14.5 MtCO2 in 2035 (Government of the United Arab Emirates, 2019b). Vehicle fuel economy labels have been in place since 2017 (ESMA, 2017).
The UAE is also currently developing its national train network, with a total of 1,200 km of planned railways. 264 km of railways for freight services have been operational since 2016 and a further 600 km are currently under construction (Government of the United Arab Emirates, 2019a).
In light of the increased intent in recent years to reduce the UAE’s reliance on gas imports, green building codes became mandatory in 2011 in Abu Dhabi under the Estidama Program and in 2014 in Dubai (Emirates GBC, 2014). Dubai has its own energy service company, Etihad ESCO, which aims to make Dubai’s built environment a leading example of energy efficiency for the region and the world. It does this by executing building retrofits, increasing the penetration of district cooling and facilitating access to project finance (Etihad ESCO, 2014; MOCCAE, 2017). To keep the window open for a 1.5°C-consistent GHG emission pathway, all new buildings should be fossil-free and near-zero energy by 2020 worldwide, and renovation rates should be increased from less than 1% in 2015 to 5% by 2020 worldwide (Kuramochi et al., 2017).
Energy efficiency standards and labels for air conditioners and other electrical equipment have been introduced in the UAE, and inefficient light bulbs have been banned from import since 2014 (Ministry of Energy, 2015a).
 There exists still no federal policy but only Emirate-level policies which vary throughout the UAE. The Ministry of Energy is leading the country’s first effort to develop a national strategy.
The UAE has a target to divert 75% of its waste from landfills by 2021 under the Vision 2021 strategy (Government of the UAE, 2019). According to the Fourth National Communication, there is a potential of up to 900 MW of Waste-to-Energy projects, of which 180 MW are currently under construction (Government of the UAE, 2019; Government of the United Arab Emirates, 2019b).