UAE and Germany Deepen Economic Ties, Focusing on AI and Energy Investment
The UAE and Germany are enhancing their economic partnership, with a particular focus on investments in energy transition, advanced technology, and artificial intelligence, building on over 50 years of diplomatic relatio
The United Arab Emirates and Germany are strengthening their long-standing economic relationship, with new investments primarily directed towards the energy transition, advanced technology, and artificial intelligence sectors. This strategic shift follows five decades of diplomatic and economic cooperation.
High-level discussions between UAE President Sheikh Mohamed and German President Frank-Walter Steinmeier and Chancellor Friedrich Merz are set to further deepen this collaboration, specifically in economic and development areas. The focus on these sectors reflects a mutual ambition to expand beyond traditional trade ties.
Expanding Trade and Investment
Non-oil bilateral trade between Germany and the UAE reached $15.51 billion last year, marking a 14.15% increase from the previous year's $13.59 billion, according to the UAE Ministry of Foreign Affairs. UAE exports to Germany saw a surge of over 50%, while re-exports climbed more than 17% during the same period. Germany, being the world's third-largest economy, is the UAE's most significant economic partner within the Gulf Cooperation Council.
Investment in the industrial sector and advanced technology has significantly grown over the last decade. Key agreements recently signed include collaborations for the supply of liquefied natural gas (LNG) to Germany and European markets between Adnoc and RWE, and a partnership between Masdar and RWE to explore investments in battery energy storage systems (BESS) projects in Germany. Also, Covestro, Fertiglobe, and Ta’ziz are exploring opportunities in the ammonia and sustainable materials sectors.
Future Outlook and Strategic Partnerships
The UAE aims to expand its non-oil foreign trade to $1.089 trillion by 2031. With approximately 2,000 German companies currently operating in the UAE, many use the country as a hub for broader Middle East, Africa, and Asia markets. The upcoming establishment of the UAE — German Business Council in July 2025 is anticipated to further facilitate private sector engagement, especially in advanced technology, energy, infrastructure, and sustainable development. The UAE is also in advanced discussions for a Comprehensive Economic Partnership Agreement (CEPA) with the EU, having finalised 38 such agreements since 2021.
Questions, answered
- What is the primary focus of the strengthened economic ties between the UAE and Germany?
- The deepened economic partnership between the UAE and Germany is primarily focused on investments in the energy transition, advanced technology, and artificial intelligence sectors.
- What was the value of non-oil bilateral trade between the UAE and Germany last year?
- Non-oil bilateral trade between Germany and the UAE reached **$15.51 billion** last year, showing a 14.15% increase from the $13.59 billion recorded in the previous period.
- Which specific energy deals have been signed between the two nations?
- Key energy deals include a strategic collaboration between Adnoc and RWE to explore opportunities for the supply of liquefied natural gas (LNG) to Germany and European markets, and an agreement between Masdar and RWE to identify and pursue investments in battery energy storage systems (BESS) projects in Germany.
- What is the UAE's target for non-oil foreign trade by 2031?
- The UAE aims to increase its non-oil foreign trade to **$1.089 trillion by 2031**, as part of its economic diversification strategy.
- When will the UAE–German Business Council be established?
- The UAE — German Business Council is scheduled to be established in **July 2025**, aimed at fostering private sector engagement across advanced technology, energy, infrastructure, and sustainable development.
This brief was summarised and rewritten by Gaia Living from public reporting. Figures and details reflect the original sources.