Nigeria Targets $3 Billion Yearly Revenue Through New Carbon Market Framework
President Bola Tinubu approves the full Implementation of National Carbon Market Strategy
President Bola Tinubu has officially approved the establishment of the National Carbon Market Strategy, a regulatory framework designed to position Nigeria as a premier destination for carbon-related investments. The initiative aims to harness the country’s vast environmental assets to generate an estimated $3 billion in annual revenue by 2030. This move aligns with Nigeria’s commitment to the Energy Transition Plan and its broader goal of achieving net-zero emissions.
Institutional Oversight and the Inter-Agency Council
The approval follows a report submitted by the Inter-Agency Council on Nigeria’s Carbon Market Activation Plan. The council is tasked with creating a transparent and credible environment for the trading of carbon credits. To ensure institutional rigour, the framework will be domiciled under the National Council on Climate Change (NCCC). This body will oversee the registration, monitoring, and verification of carbon projects to ensure they meet international standards, such as those set by the Article 6 of the Paris Agreement.
By establishing a formal market, the Federal Government intends to eliminate the historical fragmentation of carbon projects in Nigeria. The new strategy centralises data collection and provides a clear legal pathway for private sector participants to engage in emission reduction projects that yield tradeable credits.
Economic Projections and Investment Potential
The Federal Government projects that the carbon market will be a significant driver of non-oil revenue. By 2030, the government expects the market to facilitate $3 billion in yearly inflows. These funds are anticipated to stem from investments in renewable energy, reforestation, and methane capture projects. According to the Presidential Committee, the framework will incentivise local and international companies to invest in green technology, thereby creating jobs and fostering industrial growth.
The strategy also focuses on "integrity driven" pricing. By ensuring that Nigerian carbon credits are verifiable and high impact, the government aims to command premium prices on the global voluntary and compliance markets. This approach is intended to attract Foreign Direct Investment (FDI) from multinational corporations seeking to offset their global carbon footprints through credible African projects.
Alignment with Global Climate Objectives
This framework serves as a critical component of Nigeria's Nationally Determined Contributions (NDCs). It provides a structured mechanism for the country to meet its international climate obligations while simultaneously addressing domestic energy poverty. The Inter Agency Council emphasized that the carbon market is not merely a revenue tool but a strategic vehicle for technology transfer. Through these projects, Nigeria expects to acquire advanced climate smart technologies in agriculture and manufacturing.
Furthermore, the initiative seeks to empower local communities. A portion of the proceeds from carbon credit sales will be reinvested into community based environmental projects, ensuring that the economic benefits of the green transition are distributed equitably across the federation.
Conclusion
The approval of the National Carbon Market Strategy marks a decisive shift in Nigeria’s approach to climate finance. By setting a clear target of $3 billion by 2030, the administration is signaling its intent to transition from a fossil-fuel-dependent economy to a diversified, green-oriented one. The success of this framework will depend on the transparent implementation of regulatory guidelines and the ability of the NCCC to maintain high verification standards that satisfy global investors. Moving forward, the activation of this market is expected to play a pivotal role in stabilising Nigeria’s capital account through sustained green capital inflows.
