ORF Middle East Examines SME Role in UAE Net-Zero 2050 Strategy

An analysis published by think tank ORF Middle East examines the integration of small- and medium-sized enterprises (SMEs) into the United Arab Emirates' decarbonisation targets under the UAE Net-Zero by 2050 Strategy. According to author Reem Sagahyroon, SMEs represent approximately 94 to 95 percent of all operating businesses in the UAE and contribute more than 60 percent of national non-oil gross domestic product (GDP).

The UAE government aims to expand the SME sector to one million enterprises by the end of 2030 through initiatives such as the National Agenda for Entrepreneurship and SMEs, alongside broader local content programmes. In terms of sector distribution, the UAE classifies SMEs across trade (73 percent), services (16 percent), and industry (11 percent). Although industrial SMEs form a smaller share, they receive targeted government backing via Operation 300bn and the AED 1 billion National Industrial Resilience Fund in sectors such as primary metals, construction materials, electrical equipment, and chemicals.

While individual small firms have modest footprints, the study notes that SMEs account for up to 60 percent of commercial emissions globally. However, smaller enterprises face significant barriers compared to large corporations, including limited awareness, reduced internal operational capacity, a lack of technical expertise, lower access to finance, and challenges navigating complex emissions measurement and reporting frameworks.

To bridge this gap, the report suggests leveraging established mechanisms such as the SME Climate Hub and financial institutions to provide sector-specific peer-to-peer training, streamlined monitoring regulations, and targeted transition finance. The analysis notes that supporting SME transition is essential for decarbonising domestic supply chains as large UAE corporations—such as Masdar, Abu Dhabi National Oil Company (ADNOC), and Al-Futtaim—increasingly monitor Scope 3 emissions and select low-carbon suppliers.