By Obiabin Onukwugha
The Nigerian government has approved the implementation and operationalization of a carbon market framework that estimates revenue generation of at least $3 billion, an equivalent of N4,270 trillion, a year, by 2030.
The framework, it was gathered was approved by President Tinubu earlier this week. The government is seeking to tap emissions-reduction potential across the energy, agriculture, forestry, waste and industrial sectors.
By this, the federal government also plans to prioritize participation in the voluntary carbon market and international trading, while also implementing a domestic emissions trading system and carbon tax. at a later date.
Director-general of Nigeria’s National Council on Climate Change, Tenioye Majekodunmi, who spoke on the development to journalists in Abuja, said “the new policy includes the launch of a national carbon registry, mandatory emissions reporting for companies and phased compliance mechanisms that aligns with the country’s updated climate plan, which commits to emissions cuts by 2035 and net zero emissions by 2060.”
She also stated that operationalizing the framework is an indication that carbon markets are a key part of the country’s economic strategy, as well as a tool for attracting foreign capital, supporting the energy transition and anchoring Africa’s role in global climate finance.
“The policy also allows for tax exemptions on carbon credit revenue for up to a decade, accelerated capital allowances for low-carbon assets, and deductions for research and development tied to emissions-reduction projects, while also eliminating structural risks that have constrained investments in carbon markets,” Majekodunmi said.
Nigeria already has 57 registered voluntary carbon projects, largely concentrated in household energy, renewable power and forestry, with 5.8 million tons of credits issued so far, government data shows. Majekodunmi said the new framework is intended to rapidly expand that pipeline, while enforcing international quality standards.
She stated that oersight will rest with the NCCC, chaired by the president and supported by a carbon-market office responsible for project approvals, registries, authorizations and market supervision.
The framework also enables public-private partnerships and bilateral cooperation, potentially opening Nigeria’s credits to sovereign and corporate buyers seeking compliance-grade offsets.
Bloomberg reports that a carbon credit is supposed to represent one metric ton of CO2 that’s been avoided, reduced or removed from the atmosphere based on projects such as reforestation.