President Bola Ahmed Tinubu has formally approved a National Carbon Market Framework, a groundbreaking policy designed to position Nigeria as a competitive player in global carbon trading and unlock significant new revenue streams for the economy. The initiative is expected to generate at least $3 billion in annual climate finance by 2030, according to government officials.
The approval marks a pivotal moment in Nigeria’s climate strategy, signalling a shift toward market-based mechanisms that allow businesses and projects to trade carbon credits, a tradable asset representing verified reductions in greenhouse gas emissions. Under the new framework, companies that cut emissions can earn carbon credits and sell them on domestic and international markets, effectively creating a financial incentive for climate action.
Director-General of the National Council on Climate Change (NCCC), Tenioye Majekodunmi, highlighted that the framework provides the regulatory and institutional backbone needed to attract climate finance, support mitigation and adaptation projects, and strengthen Nigeria’s eligibility for global funding windows.
“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,” Majekodunmi said.
The policy includes the operationalisation of the Climate Change Fund, revamped reporting and compliance guidelines for large emitters, and incentives to encourage private sector participation. It also restores the NCCC’s budget line to ensure sustained institutional capacity.
According to official statements, the framework is expected to unlock between $2.5 billion and $3 billion in carbon finance annually over the next decade, providing a fresh funding source for climate-smart infrastructure, nature-based solutions, and energy transition priorities.
The development comes as Nigeria prepares to engage more deeply in international climate negotiations, including the upcoming COP30 conference. Building a functional carbon market is seen as a strategic move to elevate Nigeria’s voice in global climate finance discussions and attract long-term investment.
By tapping into international climate finance and carbon markets, Nigeria aims to diversify its revenue base beyond oil exports, boost foreign exchange earnings, and foster sustainable economic growth, a critical strategic shift amid global energy transition pressures.
Experts have noted that carbon markets can stimulate private investment in renewable energy, forestry, and sustainable agriculture while creating jobs and enhancing environmental resilience. Analysts also see potential for stronger integration with Nigeria’s Energy Transition Plan and broader climate commitments under the Paris Agreement.
The new framework builds on earlier policy work, including the Carbon Market Activation Policy finalised in 2025, which aimed to unlock billions of dollars in carbon credit revenue and high-integrity climate investment.
As implementation begins, stakeholders from government, private sector, and civil society will be closely watching how the carbon market develops and attracts global climate capital to support sustainable growth in one of Africa’s largest economies.
