In the News:
- Nigeria has approved a carbon market targeting $3 billion.
- The policy allows global carbon trading and a future domestic system.
- It includes a national registry, emissions reporting and green incentives.
Nigeria plans to generate up to $3 billion annually from carbon trading after approving a framework for large scale emissions allowance sales.
The policy opens one of Africa’s largest economies to voluntary and international carbon markets while preparing for a domestic trading system and carbon tax in the future.
President Bola Tinubu approved the operationalisation of the carbon market framework on Monday, with the government aiming to tap emissions reduction potential across the energy, agriculture, forestry, waste and industrial sectors.
The framework prioritises participation in the voluntary carbon market and international trading, while laying the groundwork for domestic compliance mechanisms, Tenioye Majekodunmi, Director General of Nigeria’s National Council on Climate Change (NCCC), told reporters.
“A carbon credit represents one metric ton of CO2 that has been avoided, reduced or removed from the atmosphere based on projects such as reforestation,” Majekodunmi said.
She added that the framework is intended to rapidly expand Nigeria’s pipeline of carbon projects while enforcing international quality standards.
Operationalising the framework indicates that carbon markets are now a central part of Nigeria’s economic strategy and a tool for attracting foreign capital.
Majekodunmi noted that the policy will support the energy transition and strengthen Africa’s role in global climate finance.
How the carbon market will work
The new policy includes a national carbon registry, mandatory emissions reporting for companies, and phased compliance mechanisms aligned with Nigeria’s climate plan.
The country has committed to reducing emissions by 2035 and achieving net zero by 2060.
Majekodunmi explained that the framework also allows public-private partnerships and bilateral cooperation, potentially opening Nigerian carbon credits to sovereign and corporate buyers seeking compliance grade offsets.
In addition, the policy provides tax exemptions on carbon credit revenue for up to 10 years.
Nigeria currently has 57 registered voluntary carbon projects, primarily in household energy, renewable power and forestry, with 5.8 million tons of credits issued so far.
Majekodunmi said the framework aims to expand this number significantly and improve project integrity. Oversight will rest with the NCCC, chaired by the president, supported by a carbon market office responsible for project approvals, registries, authorisations and market supervision.
Carbon trading in Africa
Several African countries, including Zimbabwe, Kenya and Malawi, have recently regulated their carbon offset markets to generate revenue.
Global carbon credit supply is expected to grow 20-to-35 fold by 2050, driven by a market reset focused on integrity and impact.
The carbon market framework positions Nigeria to attract foreign investment, boost revenue, and create a transparent system for trading emission reductions.
