President Bola Ahmed Tinubu has given formal approval for the rollout of Nigeria’s long-awaited carbon market framework, a policy the Federal Government says could unlock at least $3 billion in annual revenue by 2030 while accelerating the country’s climate and energy transition goals.
The approval was confirmed by Tenioye Majekodunmi, Director-General of the National Council on Climate Change (NCCC), who described the move as a major step toward positioning Nigeria as a key player in global carbon trading.
Opening Nigeria to Global Carbon Trading
With the framework now operational, Nigeria will be able to participate more actively in voluntary and international carbon markets, allowing companies and governments to trade verified emissions-reduction credits generated across the country.
According to the NCCC, opportunities will span multiple sectors, including energy, agriculture, forestry, waste management, and industrial production.
Over time, the government plans to introduce a domestic emissions trading system and explore the use of a carbon tax as part of broader climate policy reforms.
Majekodunmi said the policy signals that carbon markets are now central to Nigeria’s economic planning, not only as a climate tool but also as a channel for attracting foreign investment and strengthening Africa’s role in global climate finance.
Key Features of the Framework
The carbon market framework introduces a number of regulatory and fiscal measures designed to boost investor confidence and improve transparency. These include:
- The establishment of a national carbon registry
- Mandatory emissions reporting for covered entities
- A phased compliance system aligned with Nigeria’s climate commitments
- Tax holidays of up to 10 years on income earned from carbon credits
- Accelerated capital allowances for low-emission technologies
- Research and development tax deductions linked to emissions-reduction projects
The government says these incentives are aimed at removing long-standing structural barriers that have limited investment in carbon projects.
Nigeria’s Existing Carbon Footprint
Nigeria already hosts dozens of voluntary carbon projects, particularly in household clean energy, renewable power generation, and forestry.
Official figures indicate that millions of carbon credits have been issued so far, with the new framework expected to significantly expand the scale and quality of projects.
Oversight of the market will remain with the National Council on Climate Change, chaired by the President, while a dedicated carbon market office will handle project approvals, registry management, authorizations, and market supervision.
Global and Regional Context
Carbon credits represent verified reductions or removals of greenhouse gas emissions, typically measured as one metric ton of carbon dioxide equivalent.
Global demand for such credits is expected to grow substantially over the coming decades, even as concerns about market integrity have led to tighter standards.
While confidence in carbon markets has declined since 2021 due to quality concerns, several African countries — including Kenya, Zimbabwe, and Malawi — are moving to regulate their offset industries.
Nigeria’s framework is designed to meet international standards, making its credits attractive to both sovereign and corporate buyers.
Part of a Broader Climate Strategy
The approval follows Nigeria’s announcement in late 2025 of plans to mobilize up to $3 billion annually in climate finance through its carbon market and Climate Change Fund.
The strategy was unveiled on the global stage at the UN Climate Change Conference (COP30) in Brazil.
Government officials have emphasized that Nigeria’s climate agenda is focused on balancing environmental protection with economic growth and long-term resilience.
With the framework now in force, authorities say the priority is to rapidly scale up high-quality carbon projects while ensuring transparency, accountability, and global credibility.
