For a country whose economy was largely based on oil, the UAE is now proving to be a significant supporter of sustainable startups. With time, the UAE has shifted their vision and is becoming one of the fastest-growing startup hubs, contributing to a sustainable future.
Abu Dhabi, its capital city, is one of the primary contributors to this change. Many factors are contributing to the development of a greener economy in the UAE and Abu Dhabi, including the establishment of an ecosystem that facilitates green tech ventures and supportive policies. In this blog, we will discuss how they have achieved a green economy and a few thriving sustainable startups in Abu Dhabi.
What is a green economy?
A green economy focuses on lowering carbon emissions, efficient resource utilization, preserving the ecosystem, and being socially inclusive. Simply put, it means maintaining and preserving environmental resources and creating job opportunities that contribute to doing the same.
The Green Economy Initiative, established by Sheikh Mohammed in 2012 with the slogan ‘A green economy for sustainable development,’ aims to boost the country’s competitiveness and sustainability while also preserving the environment for future generations (source).
This initiative was formed to lessen the economy’s reliance on oil and diversify it by producing green products and technology to use and export. Aligned with the UAE’s vision, Abu Dhabi has created several plans and initiatives to become a top achiever in the green economy.
Why is the green economy important for green tech startups in the UAE and Abu Dhabi?
Abu Dhabi, just like Dubai, is a center of attraction in the UAE. It is the principal city in the country. Therefore, its role in developing a green economy is crucial. Abu Dhabi has focused on creating a supportive ecosystem for the UAE’s sustainable business startups.
A few establishments include the Abu Dhabi Investment Office (ADIO), the Abu Dhabi Research and Development Authority (ADRDA), and the Advanced Technology Research Council (ATRC). They focus on investing in and supporting
R&D in emerging industries. Their efforts earned the UAE a 2nd rank in WIPO’s Global Innovation Index in 2023 (source).
These initiatives support green tech startups in the UAE and Abu Dhabi in diverse industries, especially energy, fintech, and the environment. In addition to the funding and resources support, Abu Dhabi offers a Golden Visa for startups, business incubators, and Takamul to support the complete innovation cycle, from idea to startup establishment.
Actions under the Green Economy initiative include:
- The production and promotion of renewable energy.
- Raising and promoting investment in the green economy.
- Facilitating the production, promotion, and export of green economy products/services.
- Building real estate and urban development while preserving nature.
- Preserve biodiversity and ecological balance from climate change and promote organic agriculture.
- Use scarce resources like water and electricity produced from natural resources rationally.
- Supporting the development and promotion of green technology.
The supportive initiatives ease the establishing, developing, and promoting of sustainable startups in Abu Dhabi. Some policies make sustainable business startups in Abu Dhabi lucrative, whether you are an entrepreneur or investor. Startup events like the International Investors Summit are the perfect place to familiarize yourself with green economy initiatives and create a network of like-minded, sustainability-focused startups, investors, and mentors. Let’s explore some known sustainable startups.
Top sustainable startups in Abu Dhabi
Abu Dhabi houses many innovative startups, primarily focused on the green economy. Here are a few known sustainable business startups in Abu Dhabi in emerging industries:
Masdar
Masdar, established in 2006 by Dr. Sultan Ahmed Al Jaber, is a titan of the energy sector in Abu Dhabi. They have worked closely with government-led organizations to diversify the economic reliance on natural resources, reduce carbon emissions, and develop renewable energy projects to support the green economy vision of the UAE. They are present in more than 30 countries and have diversified renewable energy projects, including a solar plant in Abu Dhabi.
They have recently joined hands with Abu Dhabi National Energy Company PJSC (TAQA) and Abu Dhabi National Oil Company (ADNOC) to create a powerhouse of clean energy in the UAE.
First Abu Dhabi Bank (FAB)
First Abu Dhabi Bank (FAB), established in 2017, offers diverse banking services, including sustainable financing. They have collaborated with the UAE government and the UN-convened alliance for the net-zero emission by 2050 and have been driving growth in ESG finance to enable entrepreneurs, investors, and business owners to work on ESG and create sustainable business startups in Abu Dhabi. The headquarters of the FAB is in Abu Dhabi. FAB is now offering green bonds to invest in sustainable initiatives.
Tadweer Group
It was founded in 2008 and is a subsidiary of ADQ. They started as a waste management company with state-of-the-art technology and are currently the sole custodian of waste management in Abu Dhabi. Tadweer Group collects waste across diverse channels, including reward-based apps, extracting valuables, and managing the rest. They commit to diverting 80% of waste from Abu Dhabi’s landfills by 2030.
CarbonSifr
CarbonSifr was founded by Onur Elgun, Mustafa Bosca, and Muhammed Yildirim. It works to help organizations and businesses to reduce their carbon emissions. They use AI-powered digital solutions to track usage and create appropriate strategies to reduce carbon emissions. They are pioneering the way to manage the emission in natural resources while settling in Abu Dhabi.
CarbonSifr has a diversified portfolio that includes its CO2e projects in the UAE, Ethiopia, and Pakistan.
Conclusion
Green tech startups in the UAE drive their vision to become net-zero and develop a green economy. The green economy focuses on sustainable businesses, preserving the natural resources, and creating jobs in the emerging sectors. Abu Dhabi is one of the thriving contributors to the UAE to achieve these goals.
Abu Dhabi has created a supportive ecosystem to support the green economy initiatives by establishing policies, funding organizations, R&D agencies, and more. Therefore, entrepreneurs and investors are attracted to sustainable business startups in Abu Dhabi. Successful sustainable businesses include Masdar, FAB, Tadweer Group, and CarbonSifr. These are leading names in various sustainability-focused sectors like energy, waste management, and banking.
FAQs
Which startup businesses are more profitable in Abu Dhabi?
Businesses and startups aligning with the city’s vision for sustainability and benefit will likely be more profitable in Abu Dhabi. The reason is their strong government backing, such as tax incentives and funding programs specific to sustainable startups. Abu Dhabi offers diverse programs and incentives in energy, carbon emission control, waste management, banking, and more sectors. So, startups in these sectors are likely to succeed. Startups leveraging cutting-edge technology like IoT, AI, and clean energy solutions often see greater profitability due to innovation-driven competitive advantages.
Why is Abu Dhabi the hub of sustainable business startups?
Abu Dhabi has become a hub for sustainable business startups due to its strategic vision, robust infrastructure, and government-led initiatives like Masdar City and the Abu Dhabi Economic Vision 2030. The city offers incentives such as grants, green financing, and favorable regulations to promote eco-friendly businesses. Its global reputation for sustainability, access to advanced technology, and a growing pool of local and international investors create a thriving ecosystem for sustainable startups to flourish.
How can investors benefit from investing in sustainable startups in Abu Dhabi?
Investors in Abu Dhabi’s sustainable startups enjoy multiple benefits, including high returns from rapidly growing markets. These startups align with the nation’s vision to become net-zero and drive global trends in the green economy, attracting ethical investment opportunities. Additionally, government incentives like tax benefits and green financing further enhance profitability. By investing in sustainable startups, investors contribute to environmental goals and position themselves as leaders in the growing sustainability-driven economy.
What are the challenges of sustainable startups in Abu Dhabi?
Sustainable startups in Abu Dhabi face challenges such as high initial capital requirements for advanced technologies, navigating regulatory complexities, and competing in a rapidly evolving market. Access to skilled talent in niche areas like renewable energy and environmental technology can also be a hurdle. However, these challenges are tackled by solid government support, grants, and partnerships with global organizations, making the ecosystem favorable for overcoming obstacles and achieving long-term success.
