meed-logo

line1 line2 line3
SIGN IN / REGISTER

UAE construction strives to decarbonise

29 June 2023

There are several reasons for the UAE construction sector to decarbonise. The most compelling stand in stark contrast to each other. On one hand, the industry is a significant contributor to the national economy. On the other, it is one of the biggest contributors to global greenhouse gas (GHG) emissions.

This discrepancy makes it inevitable that the industry will have to adopt more sustainable practices.

“Can UAE construction truly achieve decarbonisation? Yes, in the long term,” says Craig Thackray, vice president – environment MEA at US-based consultancy Aecom.

“Today, it is more a matter of when this would be realistically achievable.”

A report by the Arab Monetary Fund in 2022 highlights that the construction sector contributed almost $39bn to the UAE’s GDP in 2021, accounting for 9 per cent of the nation’s $402.9bn GDP that year.

The sector is also linked to every other major sector in the UAE: it is the starting point for industries through the construction of physical environments and supporting infrastructure.

In the UAE, construction is synonymous with innovation and growth, enabling world-class projects such as the Burj Khalifa, Palm Jumeirah, Louvre Abu Dhabi and Dubai Metro.

As the country’s real estate sector enjoys demand growth, its construction players reap the benefits. Recent months have seen project announcements including Al-Habtoor Group’s estimated AED9.5bn ($2.6bn) residential developments, the AED1.2bn Upper House project by Dubai Multi Commodities Centre in partnership with Ellington Properties and the $5.4bn mixed-use Dubai South project announced by Azizi Developments. All of these represent major opportunities for contractors and their suppliers.

Environmental impact

Against all its positive contributions, however, weighs the construction industry’s negative impact on the environment.

The built environment is responsible for almost 40 per cent of global carbon emissions annually. This includes both operational carbon, which is emitted during daily use, and embodied carbon from the building materials themselves.

The World Bank estimates that about 70 per cent of global GHG emissions come from infrastructure construction and operations such as power plants, buildings and transport.

A report from the Global Alliance for Buildings & Construction during the 27th UN Climate Change conference (Cop 27) in 2022 highlights that, despite increasing investment in boosting energy efficiency and lowering energy intensity, the building and construction sector’s energy consumption and carbon dioxide (CO2) emissions have rebounded since the Covid-19 pandemic.

With rising real estate demand there comes increasing pressure from sustainability-focused investors. Property consultancy JLL notes that 63 per cent of leading real estate investors strongly agree that “green strategies can drive higher occupancy, higher rents, higher tenant retention and overall higher value”. This means that investors are actively seeking more sustainable ventures.

In a bid to stay ahead of the curve, over the past decade the UAE has introduced regulations and standards to incentivise sustainable development. These include Dubai’s green building rating system (Al-Sa’fat) and the Dubai building code, which integrates some sustainability principles; Abu Dhabi’s Pearl rating system (Estidama); and Ras al-Khaimah’s green building regulations (Barjeel) and green public procurement guidelines. More are expected to follow.

“Sustainability is on the strategic agenda in the UAE construction sector,” says Tamara Bajic, associate director – strategy and advisory at engineering consultancy AESG.

“Driven by operational expenditure reduction and green financing schemes, and supported by the UAE’s Net-Zero by 2050 pathway, a growing number of businesses are demonstrating their commitment to decarbonisation.”

Bajic says that developers are driving decarbonisation by investing in low-carbon construction materials and building envelopes; designing for solar energy utilisation; thinking upfront about operational emissions; and planning energy-efficient mechanical, electrical and plumbing systems.

Challenges arise during the implementation process, however, as well as in aligning project requirements with a contractor or supplier’s “decarbonisation maturity”, says Bajic.

At present, in the UAE market there is a lack of visibility into the sustainability processes of suppliers, and limited availability of low-carbon materials and technological solutions. “In most cases, developers cannot directly control emissions from construction activities as they are dependent on outsourced construction contractors,” adds Bajic.

Procurement teams can play a role in spotting the data blind spots and building sustainable procurement systems. “This will be key to influencing the contractors’ business models to take into account product life cycle emissions and activities performed on the construction site, and to implementing carbon-reduction initiatives,” she says.

However, reluctance remains when it comes to overhauling entrenched industry practices, notes Aecom’s Thackray.

“Change within the construction industry is a challenge as the magnitude required is significant and the proposed implementation time is limited,” he says.

Financial barriers also limit the implementation of decarbonisation measures, but this is slowly changing in light of recent commitments made by financial institutions and large clients in the UAE. First Abu Dhabi Bank has committed to lending, investing, and facilitating $75bn in sustainable finance by 2030, while Abu Dhabi Commercial Bank plans to provide AED35bn in green finance by 2030. Meanwhile, Abu Dhabi National Oil Company (Adnoc) is supporting decarbonisation by allocating $15bn for projects focused on clean power, carbon capture and storage and energy efficiency.

“Carbon-reduction initiatives are not necessarily costly if we are looking at the long-term goals,” says Bajic. “In most cases, the carbon reductions have a highly positive impact on the operational expenses, and offer fast returns.”

Working together

As changes are introduced in the industry, and the shift towards the use of sustainable building materials and cleaner fuels picks up pace, it is important to take into account the current footprint of new and existing developments, says Bajic.

“Clients and consultants can then identify initiatives that support decarbonisation and prioritise them by conducting a cost/benefit analysis to understand what is achievable within the company’s absorption capacity.

“This needs to be followed up with clear minimum sustainability requirements for new projects, as well as with incentives to support the scale-up of new technologies and access to renewable energy infrastructure.”

Thackray says that governments and clients can facilitate change through incentivisation schemes to provide tangible benefits to contractors.

“There needs to be a combination of incentives – this includes financiers and organisations establishing contract provisions to drive sustainable practices,” he says.

“Government regulation would be the most effective incentive, however, as failure to comply would have significant consequences. Legislative requirements can thus drive meaningful change to meet sustainability targets.”

Ultimately, the construction industry must take a whole life cycle approach to its projects, from design and procurement through to construction, operations and end-of-life.

“The opportunities lie in the multi-level approach and collaboration for decarbonisation,” says Bajic.

“Once the decarbonisation initiatives are drafted across the value-chain, the involved players must identify areas of collaboration and co-create the delivery of sustainable projects together with designers, architects, suppliers, contractors, and also governments and financial institutions.”

https://image.digitalinsightresearch.in/uploads/NewsArticle/10937444/main.gif
Mehak Srivastava

Register for MEED's guest program now to access this article.

Click here to register
Exclusive from Meed
Related Articles
  • Mace confirms Muscat cultural complex appointment

    3 September 2026

    UK-headquartered engineering firm Mace Consult has confirmed its appointment to manage the construction of the Sayyid Tarik Bin Taimur Cultural Complex in the Al-Seeb area of Muscat.

    The firm will provide project leadership, programme management, commercial oversight and delivery assurance services.

    The complex will be developed on a 400,000-square-metre (sq m) site. Centred on an urban plaza, it will bring together a range of cultural and institutional facilities.

    These include a 23,000 sq m national library, a 15,500 sq m national archives, four facilities buildings with a combined area of 14,000 sq m, and a 5,000 sq m energy and data centre.

    At the heart of the development is the national theatre, which will include a 1,000-seat auditorium and a 250-seat auditorium. The facilities will sit within landscaped gardens and water features, alongside a signature canopy structure.

    In October 2023, the Ministry of Culture, Sports & Youth awarded a design-and-build contract for the complex to a joint venture of local firm Saif Salim Issa Al-Harrasi and Turkiye’s Sembol Construction, MEED reported.

    In January 2026, UAE-based steel structure manufacturer Emirates Building Systems, a wholly owned subsidiary of Dubai Investments, won a contract to deliver the project’s structural steel package.

    Last month, Kuwait-based engineering and architecture consultancy SSH was appointed as the project’s construction supervision consultant.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/19314737/main.jpg
    Yasir Iqbal
  • Read the September 2026 MEED Business Review

    3 September 2026

    Download / Subscribe / 14-day trial access

    Nuclear energy is becoming an increasingly important part of the GCC’s long-term power strategy, as governments seek to strengthen energy security, diversify generation and meet decarbonisation goals.

    Saudi Arabia’s civil nuclear cooperation deal with the US marks a major step forward for its plans to develop its first commercial nuclear power plant, while rising electricity demand across the region is creating further momentum.

    With the UAE already operating the Middle East’s first commercial nuclear power station, Saudi Arabia targeting up to 17GW by 2040 and Bahrain exploring small modular reactor technologies, our latest Agenda feature examines the growing role of nuclear energy in the GCC’s future power projects pipeline.

    September’s Market Focus turns to Kuwait, where the country’s oil-dependent economy has weathered unprecedented disruption, yet major investment and infrastructure deals point to resilience.

    This edition also includes a downstream industry report, exploring the accelerating investment in gas processing and associated infrastructure across Mena, the major projects driving spending, and the growing focus on NGL recovery, efficiency and higher-value gas products.

    In the latest issue, we speak to Emsteel chief commercial officer Michael Rion about the Abu Dhabi steelmaker’s plans to strengthen its position in domestic and international markets, including the launch of its ES600 steel rebar and the expansion of its long-standing partnership with Adnoc Group.

    We also examine the GCC’s accelerating tunnelling boom, as major metro, sewerage and road projects increasingly move underground. The feature explores the scale of investment, the contractors and technology driving the market, and the challenges facing the region as demand for tunnelling expertise and equipment grows.

    We hope our valued subscribers enjoy the September 2026 issue of MEED Business Review. 

     

    Must-read sections in the September 2026 issue of MEED Business Review include:

    > AGENDA: Gulf nuclear revival takes shape

    INDUSTRY REPORT:
    Downstream
    > Gas processing takes centre stage in Mena region

    > INTERVIEW: Emsteel persists with business productivity and efficiency

    > TUNNELS: The Gulf’s next construction boom is happening underground

    > KUWAIT MARKET FOCUS: 
    > COMMENT: Kuwait keeps dealmaking alive under fire
    > GOVERNMENT: Kuwait shows tentative signs of economic development
    > BANKING: Necessity is the mother of invention for Kuwaiti lenders
    > OIL & GAS: Regional war to have lasting impact on Kuwaiti oil sector
    > POWER & WATER: Kuwait utilities investment shifts towards water
    > CONSTRUCTION: Kuwait construction holds up despite regional strife
    > MARKET TALK: Kuwait stands resilient amid regional tensions
    > DATABANK: Kuwait’s economic gains are dented by conflict in 2026

    > MEED COMMENTS: 
    >     Cash is king for Dubai construction
    > Aramco moves apace with Jafurah unconventional gas campaign
    > Neom’s next phase is crucial to green hydrogen pipeline
    > Oman opens door to direct power sales

    > GULF PROJECTS INDEX: Qatar leads gains as Gulf total holds

    > JUNE 2026 CONTRACTS: Middle East contract awards

    > ECONOMIC DATA: Data drives regional projects

    > OPINION: The history of false dawns

    > BUSINESS OUTLOOK: Finance, oil and gas, construction, power and water contracts

    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/19308287/main.gif
    MEED Editorial
  • Contractors submit bids for Dukhan field facilities upgrade

    3 September 2026

     

    Contractors have submitted bids to QatarEnergy for a key tender to upgrade facilities at the Dukhan oil field in Qatar, about 80 kilometres west of Doha.

    Dukhan, Qatar’s first and only onshore oil field, was discovered in 1938, with oil production starting in 1939-40. The country currently produces about 1.8 million barrels a day (b/d) of crude, with the Dukhan field accounting for about 350,000 b/d of output.

    QatarEnergy issued the tender for the Dukhan production facilities upgrade (DPFU) Phase 1B (Part 2) project on 8 June, and initially set a bid submission deadline of 26 July for contractors, which it later extended to 9 August.

    The following local contractors, among others, are understood to have submitted bids for the DPFU Phase 1B (Part 2) tender, according to information obtained by MEED Projects:

    • Doha Petroleum Construction Company (Dopet)
    • Galfar Al-Misnad Engineering & Contracting
    • Qatar Engineering & Construction Company (Q-con)

    QatarEnergy originally stipulated a bond validity of 150 days (until 23 December) and a bid validity of 120 days (until 23 November) for the project.

    The engineering, procurement, installation and commissioning (EPIC) scope covers upgrades to 56 oil manifolds, 108 gas-lift manifold slots, chemical injection systems and key pumping facilities, along with associated piping, instrumentation, control, electrical and civil works.

    The scope includes demolition of obsolete equipment, degassing station enhancements, and full testing and handover. It also encompasses additional capacity enhancement works under Part 3, mainly the installation of new oil export and produced-water transfer pumps, along with supporting facility modifications.

    The project involves complex interfaces and shutdown-critical activities requiring expertise in live-plant integration.

    The Dukhan oil field extends over an area of about 80km by 8km and consists of four reservoirs: Khatiyah, Fahahil, Jaleha and Diyab. The first three are oil reservoirs. The more recently developed Diyab reservoir contains non-associated gas and is estimated to hold around 2 billion barrels of crude oil reserves. Diyab lies on the southern flank of Dukhan.

    ALSO READ: Frontrunners emerge for Qatar offshore oil field expansion
    https://image.digitalinsightresearch.in/uploads/NewsArticle/19312615/main.jpeg
    Indrajit Sen
  • Oman tenders advisory for 3GW solar IPPs

    3 September 2026

    Nama Power & Water Procurement Company (Nama PWP) has invited bids for legal consultancy services for the development of three 1GW solar independent power projects (IPPs).

    The projects will connect to Oman’s main interconnected system (MIS) and are targeted to reach commercial operation by the second quarter of 2030.

    The bid submission deadline is 10 October.

    The state offtaker has now tendered three separate consultancy contracts for the solar IPPs, including two issued in July.

    The bid submission deadline for the financial and commercial consultancy services tender is 10 September.

    Earlier, on 15 July, a technical advisory tender was issued for the three projects as part of a 4GW programme.

    As MEED reported, the financial advisory tender covers four 1GW solar projects connected to the MIS, also targeting commercial operation by the second quarter of 2030.

    It is understood that bids were submitted for this contract on 26 August.

    Oman Electricity Transmission Company (OETC) had earlier outlined the planned grid connection for four 1GW solar IPPs as part of the sultanate’s renewable energy expansion through 2030.

    The projects are included in OETC’s Five-Year Annual Transmission Capability Statement for 2026-30.

    The first, the 1GW Adam solar IPP, is scheduled for grid integration in 2028 and is further ahead in the procurement process, with Nama PWP issuing a request for qualification for the project in June.

    OETC said it expects the 1GW Al-Kamil 2 solar project to be integrated in 2030 through the planned Sadaf 400kV grid station. The 1GW Dhofar solar IPP and 1GW Mahadha solar IPP are also scheduled for integration in 2030.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/19311796/main.jpg
    Mark Dowdall
  • US firm wins work on QatarEnergy NGL train project

    3 September 2026

    Register for MEED’s 14-day trial access 

    US-based Nessco has  that it has won a subcontract to provide telecommunications, radio and security systems for QatarEnergy’s project to add a fifth natural gas liquids (NGL) train at its fractionation complex in Qatar’s Mesaieed Industrial City.

    The subcontract was awarded to Houston-headquartered Nessco by India’s Larsen & Toubro Energy Hydrocarbon (LTEH), in its capacity as the main contractor performing engineering, procurement and construction (EPC) works on the NGL-5 project.

    MEED reported last September that QatarEnergy had selected a consortium of LTEH and Greece-headquartered Consolidated Contractors Group (CCC) to execute EPC works on the NGL-5 project.

    The aim of the project, estimated to be worth $2.5bn, is to build a fifth NGL train with the capacity to process up to 350 million cubic feet a day of rich associated gas from QatarEnergy’s offshore and onshore oil fields.

    In a statement confirming its contract award in October last year, LTEH said the scope of work on its contract “encompasses engineering, procurement, construction, installation and commissioning of a natural gas liquids plant and allied facilities for processing rich associated gas (RAG). This also involves all associated utilities and offsites and integration with existing facilities.

    “The RAG sourced from offshore and onshore oil fields will be treated at the plant to remove impurities like H2S, CO2 and H2O, producing value-added products such as lean sales gas, ethane, propane, butane and hydrocarbon condensate,” Bombay Stock Exchange-listed L&T said. 

    Under the consortium arrangement, LTEH, as the lead partner, will be responsible for engineering and procurement, while CCC will handle construction activities.

    Project scope of work

    Associated gas from the PS1, PS2 and PS3 offshore fields, as well as the Dukhan onshore field, is processed at existing facilities at the NGL complex in Mesaieed – specifically, the Fahahil stripping plant, NGL-1 and Qapco ethane recovery units.

    The planned NGL-5 facility will replace these three units at the Mesaieed complex and process gas from the PS1, PS2 and Dukhan fields.

    The scope of work on the project involves EPC of units for the following functions:

    • Feed gas compression
    • Slug handling
    • Gas sweetening
    • Dehydration
    • Mercury removal
    • NGL fractionation
    • NGL recovery
    • Product treatment
    • Propane refrigeration
    • Acid gas enrichment
    • Sulphur recovery
    • Anti-flaring
    • Utilities
    • Boil-off gas recovery
    • Drains and collection networks
    • Effluent water treatment plant
    • Carbon dioxide treatment and sequestration/export
    • Brownfield modifications
    • Product rundown pipelines

    QatarEnergy intends to start operations at the NGL-5 facility by the second quarter of 2028.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/19310738/main5414.jpeg
    Indrajit Sen