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
  • Chinese firm wins Qiddiya Janadriyah cultural district hotels

    30 June 2026

     

    Beijing-headquartered China State Construction Engineering Corporation (CSCEC) has won a contract to deliver the Janadriyah cultural district at Qiddiya entertainment city on the outskirts of Riyadh.

    The contract was awarded by gigaproject developer Qiddiya Investment Company (QIC).

    The scope covers the construction of six structures, including a heritage building, a gateway hotel, a wadi hotel, a creative hub, a community centre and an open-air market.

    QIC tendered the contract in December last year, as MEED exclusively reported.

    The award is CSCEC’s second major win at Qiddiya in recent weeks.

    Earlier this week, MEED exclusively reported that QIC had awarded CSCEC a contract to build a new transport hub at Qiddiya entertainment city.

    The project is located within the resort core zone of the development.

    MEED understands the scope includes construction of a parking structure for up to 2,000 vehicles; a transport hub comprising a passenger flow system and ticketing and transit-related facilities; retail, food and beverage and hospitality facilities; mechanical, electrical and plumbing (MEP) systems; and soft and hard landscaping works.

    QIC is accelerating plans to develop additional assets at Qiddiya City.

    Last week, MEED reported that QIC had invited contractors to prequalify for a contract to build an indoor sports arena within its Qiddiya entertainment city project.

    The multipurpose arena is designed to International Olympic Committee standards.

    It will be located in District 18, in the Uptown South area of Qiddiya.

    Once completed, the indoor arena will be capable of hosting a wide range of sports, cultural and entertainment events.

    The arena will feature numerous sports courts for basketball, handball, futsal, volleyball, tennis, boxing and gymnastics.

    It will have a seating capacity of 18,000 spectators.

    QIC’s other major projects include an e-sports arena, the National Tennis Centre, Prince Mohammed Bin Salman Stadium, a motorsports track, a racecourse, the Dragon Ball and Six Flags theme parks, and Aquarabia.

    QIC opened the Six Flags theme park to the public in December last year.

    The park covers 320,000 square metres and features 28 rides and attractions, including 10 thrill rides and 18 aimed at families and young children.

    The Qiddiya project is a key part of Riyadh’s strategy to boost leisure tourism in the kingdom.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/17489285/main.jpg
    Yasir Iqbal
  • Aldar launches Yas Island community park project

    30 June 2026

    Abu Dhabi-based real estate developer Aldar, in partnership with the Abu Dhabi Department of Community Development (DCD), has announced the launch of Yas Community Park on Yas Island.

    A key feature of the park is Nabdh Yas, a community hub developed in collaboration with DCD.

    Once open, Nabdh Yas will serve as a central gathering space and host a range of community-led programmes.

    In a statement, Aldar said: “Nabdh Yas will be delivered on a public-private partnership (PPP) basis, marking the first time private sector investment has been directed towards this type of community infrastructure.

    “With DCD overseeing the hub’s development and long-term management, the initiative reflects Abu Dhabi’s focus on innovative approaches that generate lasting social value and enhance community wellbeing,” the statement added.

    A memorandum of understanding was signed between Aldar and DCD.

    The agreement establishes a framework to expand the Nabdh Community Hub model across Aldar developments in Abu Dhabi, Al-Ain and Al-Dhafra.

    Last month, Aldar announced its Q1 financial results, reporting a 20% year-on-year increase in net profit after tax to AED2.3bn ($626m).

    Aldar Development recorded a 14% year-on-year rise in revenue to $1.7bn, while earnings before interest, taxes, depreciation and amortisation (Ebitda) increased 23% to $599m.

    UAE revenue backlog rose to $17bn at the end of March from $16.6bn at the end of December, with an average duration of 29 months.

    The group attributed its performance to revenue from its development backlog and steady income from its investment properties.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/17489270/main.jpeg
    Yasir Iqbal
  • Dubai sets August deadline for Airport Express metro bids

    30 June 2026

     

    Dubai’s Roads & Transport Authority (RTA) has given consultants until 10 August to submit proposals for a contract to study and design the Airport Express Line, which will extend from Dubai International airport (DXB) in the Al-Garhoud area to Al-Maktoum International Airport (DWC) in the Jebel Ali area.

    The previous deadline was 8 July.

    The proposed line will stretch about 55 kilometres and include five stations, providing passengers with facilities such as remote airline check-in, baggage drop-off and security screening.

    The RTA issued the tender in April, with an initial deadline of June, as MEED reported.

    The new line will run from the Red Line metro station at DXB through Al Jaddaf, along Al-Khail Road to a new station at Jumeirah Village Circle (JVC), before continuing to DWC.

    There will be two spur lines. The first will run from the new JVC station to Al-Fardan Exchange metro station at Emirates Golf Club, while the second will branch towards Business Bay, where another station will be built.

    The new line appears to follow a similar route to the Etihad Rail high-speed railway project, which is under construction and due to be completed by 2030.

    The Airport Express Line scheme is the latest metro project to be tendered by the RTA this year. Earlier this month, MEED exclusively reported that the RTA had issued the request for qualification notice for a contract to build the new Gold Line, as part of its expansion of the Dubai Metro network.

    Tendering activity is also ongoing for the Route 2020 extension, which will start from the Expo 2020 metro station and connect to DWC’s West Terminal.

    MEED exclusively reported in April that consultants had submitted bids for the project.

    The extension to the line will run for about 3km and will feature two stations.

    The existing Route 2020 metro link is a 15km-long line that branches off the Red Line at Jebel Ali metro station. The line comprises 11.8km of elevated tracks and 3.2km of tunnels, and has five elevated stations and two underground stations.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/17489266/main.jpg
    Yasir Iqbal
  • Eni increases gas production in Libya

    30 June 2026

    The Italian oil and gas company Eni has announced the startup of offshore gas production enabled by the Sabratha compression project in Libya.

    The client on the project was Mellitah Oil & Gas (MOG), a joint venture of Eni and Libya’s state-owned National Oil Corporation (NOC).

    The Sabratha compression project was designed to increase gas output from the Bahr Essalam gas field, located approximately 100 kilometres off Libya’s coast.

    The scope of the project included the installation of a new 1,600-tonne compression module on the Sabratha platform, equipped with new compression trains, providing an overall compression capacity of about 440 million cubic feet a day.

    In a statement, Eni said: “The new module enables production under low-pressure conditions, offsetting the natural decline of the Bahr Essalam field and maximising gas recovery, ensuring increased volumes of gas of about 800 million cubic metres per year and associated condensate.

    “This additional production will play a critical role in sustaining national power generation, reinforcing Libya’s energy security, and supporting export to Italy via the Greenstream pipeline.”

    The company also said that the project strengthened the resilience of Libya’s gas infrastructure and represented “a tangible contribution to the stability and growth of the country’s energy sector”.

    MOG also has two other projects in Libya that are currently under execution.

    The first is the Bouri gas utilisation project, whose tie-in and commissioning activities are under way following the recent installation of the Bouri gas recovery module.

    The other project, known as ‘Structures A&E’, will develop two offshore gas fields.

    Eni has been present in Libya since 1959 and last year had average equity production in the country of approximately 162,000 barrels of oil equivalent a day.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/17489032/main3444.jpg
    Wil Crisp
  • Jordan faces fresh round of challenges

    29 June 2026

    https://image.digitalinsightresearch.in/uploads/NewsArticle/17479483/main.gif
    MEED Editorial