The United Arab Emirates recently released its third Nationally Determined Contribution (NDC) under the Paris Agreement, in which the country mentioned its commitment and plan for reducing greenhouse gas (GHG) emissions by 47% by 2035 from the previous 2019 levels. Building on this history of climate action, the UAE's third NDC outlines a unified vision for addressing climate change that is aligned and informed by the UAE Consensus. 

The commitment to the new UAE NDC is expected to create potential opportunities for private equity/credit companies, asset managers, and impact investors to invest in renewable energy and sustainable technologies while also necessitating a reevaluation of portfolios to align with emerging ESG criteria. 

Let's explore the new NDC and UAE commitments in detail. 

About the third NDC of the UAE

The NDCs of UAE is a detailed document that outlines the country's commitment to reducing greenhouse gas emissions as part of its obligations to the Paris Agreement. The UAE NDCs are a crucial component of the Paris Agreement, aiming to cap global warming below 1.5 degrees Celsius. These documents reflect its ongoing efforts to diversify its economy and promote investment in renewable energy sources while also aiming for net zero emissions by 2050. 

On November 7, 2024, the country released its third NDC, setting an ambitious target to cut emissions by 47% by 2035. This marks a significant increase from its previous target of a 40% reduction by 2030.

Key aspects of the UAE NDC

• 
  The UAE NDC commits to a 47% emission reduction by 2035, which means a specific reduction from approximately 196.3 MtCO2eq in 2019 to 103.5 MtCO2eq by 2035. 

• 
  The new NDC included sectorial-specific targets for clean and renewable energy, including a 79% reduction in buildings, 37% reduction in waste, 20% reduction in transport, and 39% reduction in agriculture. 

• 
  In the third NDC, UAE reiterated its ambition to achieve net zero emissions by the year 2050, ensuring it aligns with global climate goals. 

• 
  The UAE is the first major emitter to submit the NDC ahead of its original deadline of February 2025, positioning itself as the leader in climate action among the oil production nations. 

Concerns about the new UAE NDC

While the UAE has set ambitious targets for sustainability and climate change, the country is continuing to invest in fossil fuel production. The UAE plans to increase its fossil fuel output by 30% by 2035 with significant investments (more than $17 billion) in offshore gas projects. Critics argue that without addressing the emissions from fossil fuel exports, the effectiveness of NDC might be undermined. 

While you’re here…

Financial institutions, private equity and credit firms, asset managers, and impact investors should carefully consider the third NDC released by the UAE, in their strategies and risk assessments to capitalize on opportunities and mitigate potential risks.

However, keeping up with government initiatives like this and assessing them accurately can be challenging. This is where Auquan comes into play. 

Auquan automates and streamlines deal sourcing, due diligence, monitoring, ESG/sustainability, and compliance workflows so teams can move faster and more efficiently. Using advanced AI, Auquan generates material and sustainability insights on any entity worldwide — public or private — fine-tuned for your team's investment and lending requirements.

Let's explore how Auquan can help you and your team eliminate tedious and time-consuming manual data work and focus more on what you do best.