Nigeria Moves to Activate Carbon Trading, Targets $3bn a Year by 2030

President Bola Tinubu has approved the full rollout of Nigeria’s carbon market framework, a policy projected to generate at least $3 billion annually by 2030.

The approval was disclosed by a presidential aide, who described the move as a major step aimed at placing Nigeria in a stronger position within the global carbon trading space.

What a Carbon Market Means in Simple Terms

A carbon market is a system that allows companies and project developers to earn carbon credits by reducing greenhouse gas emissions. These credits can then be sold to organisations that want to offset their emissions or meet climate goals.

For Nigeria, the idea is to turn climate action into a structured market that can attract investment and create new income streams for the economy.

What Nigeria Plans to Put in Place

Under the new framework, the Federal Government plans to:

1. Create a national carbon registry to track credits and reduce fraud.
2. Introduce mandatory emissions reporting for companies.
3. Roll out compliance in phases, aligned with Nigeria’s climate commitments, including emissions reduction targets by 2035 and the net-zero goal by 2060.

These steps are meant to provide clearer rules and stronger accountability, so the market can operate with better trust and transparency.

Incentives to Attract Investors

The framework also includes incentives designed to encourage private-sector participation and reduce the cost of building low-carbon projects. These incentives include:

Tax exemptions on carbon-credit revenue for up to 10 years.
Faster capital allowances for low-carbon assets.
Research and development deductions tied to projects that reduce emissions.

The government’s expectation is that these benefits will make Nigeria more attractive to green investors and help unlock climate financing at scale.

If the framework is implemented effectively, it could support investment across sectors such as renewable energy, climate-smart agriculture, waste management, forestry projects, and industrial efficiency.

Beyond the climate benefit, the bigger economic focus is revenue. The government believes a functioning carbon market can create a fresh dollar inflow pipeline and support Nigeria’s broader push for sustainable development.

The key test will be execution: how fast the registry is built, how clear the rules are, and how credible Nigeria’s carbon credits become in international markets.