UICCA Forum: 25 to 2050

The United Arab Emirates (UAE) has rapidly emerged as a leading hub for entrepreneurship and startups across diverse sectors, driven by an innovation-focused economy and a thriving ecosystem. As of 2024, the UAE’s funding landscape has been experiencing promising growth, with venture capital (VC) and private equity (PE) funding projected to exceed $2 billion by 2024 year-end, a sharp rise from $638 million in 2023. This growth reflects increasing investor confidence and evolving funding strategies. Despite this, climate-tech investments remain modest compared to other sectors. The funding gap is most pronounced as startups transition from early-stage to growth-stage funding, particularly in capital-intensive sectors like climate-tech. This policy brief focuses on addressing the critical funding gap faced specifically by climate-tech startups in the UAE, particularly those seeking to scale their operations. By examining the regulatory, financial, and infrastructure challenges in the sector, this policy brief outlines actionable solutions to support startups to expand locally and eventually regionally and globally.

Climate change is one of the most pressing issues of our time, threatening global ecosystems and nearly every facet of human existence. Among its many effects, displacement of human communities from climate change is a particularly concerning humanitarian issue. Communities in the Middle East and North Africa (MENA) region are highly vulnerable to climate-induced displacement and have already begun to face severe environmental challenges such as desertification, water scarcity, and heatwaves.

The UAE Independent Climate Change Accelerators (UICCA), the German Embassy in the UAE, and the Climate Talks Initiative, have co-hosted a policy hack titled Empowering SMEs to Drive Supply Chain Decarbonisation in Heavy Industry, as part of the ongoing UICCA Policy Hacks. The event convened policymakers, industry experts, and SME leaders to develop actionable strategies for decarbonising supply chains within the industrial sector, particularly heavy industry supply chains.

This report gathers key takeaways from CBAM Policy Hack: UAE’s Path Forward, an event which brought together relevant stakeholders from across the public, private, and third sectors to identify challenges and opportunities related to the implementation of the Carbon Border Adjustment Mechanism (CBAM) and provide recommendations regarding strategies for adapting to CBAM. The CBAM is designed to prevent “carbon leakage,” where manufacturing relocates from countries with stringent emission regulations to those with lax standards. It imposes a tax on the carbon content of imports from certain sectors. A CBAM is in the process of being implemented in the European Union (EU) and is scheduled to be imposed in the United Kingdom (UK) by 2027. With support from the British Embassy in the UAE, CBAM Policy Hack: The UAE’s Path Forward was hosted by UICCA and the UAE’s Ministry of Economy. The presence of industry players at the event encouraged knowledge sharing on how to reduce emissions across industries affected by CBAM. The event was organised based on thorough research and designed to gather diverse perspectives on how CBAM affects the UAE.

This report provides tailored EV policy considerations for the UAE, addressing key barriers across manufacturing, operation, and end-of-life stages. It includes insights from international case studies and highlights best practices for greener mobility.