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Introduction
In 2025, Nigeria took a significant step in advancing its climate action agenda with the signing of the Nigeria Carbon Market Framework (the "Framework"). Recently on January 14, 2026, the Framework was officially approved at the Abu Dhabi Sustainability Week. The Framework sets the foundation for Nigeria's participation in global and domestic carbon markets and provides a clear regulatory framework structure for the engagement in carbon trading within Nigeria.
The Framework guides the development, governance, and operationalization of carbon market activities in Nigeria. It provides a structured pathway for Nigeria's participation in both international and domestic carbon markets, in line with the Climate Change Act 2021 and Article 6 of the Paris Agreement. At its core, the Framework establishes the institutional, regulatory, and market architecture required to support the authorization, trading, investment and oversight of carbon market in Nigeria. It sets out Nigeria's approach to engaging with voluntary carbon markets, international cooperative mechanisms, and future carbon pricing instruments.
In this newsletter, we will be providing an overview of some of the objectives of the Framework.
1. Alignment with Global Climate Commitments
This Framework is aligned with Nigeria's international climate obligations, particularly its commitments under the Paris Agreement and its Nationally Determined Contributions (NDCs) which outlines the country's action plan towards the reduction of greenhouse gas emissions. NDC targets an economy-wide carbon emissions reduction by 2035. In this regard, the Framework identifies priority mitigation sectors, including energy (covering electricity generation and the oil and gas sector), transport, waste and wastewater management, industrial processes and product use, as well as agriculture, forestry, and other land use.
The NDCs are intended to serve as implementation instruments that translate Nigeria's climate commitments into measurable and verifiable actions across these priority sectors. In operationalizing Nigeria's NDCs, the Framework supports the country's transition from its current emissions trajectory to an economy-wide, absolute emissions reduction pathway.
2. Facilitation of a Voluntary Carbon Market
One of the objectives of the Framework is to facilitate the development of a voluntary carbon market as a pathway to unlocking Nigeria's carbon credit potential. In this regard, Nigeria seeks to establish a system that enables private individuals, entities, and other relevant stakeholders to trade in carbon credits outside the regulatory framework of mandatory carbon pricing instruments. However, in facilitating trade in the voluntary carbon market, stakeholders intending to participate will be required to adhere to recognized international standards. These include the Verified Carbon Standard (VCS), Gold Standard, and the Climate, Community & Biodiversity (CCB) Standards. Participants must also comply with applicable local laws and regulations, including conducting the necessary Environmental Impact Assessments (EIAs) required for environmental projects, among other regulatory obligations. In addition, participants are expected to adhere to industry best practices, with the objective of reducing greenhouse gas emissions and delivering positive social and environmental impacts on host communities.
3. Strengthening Climate Regulatory Governance
For the purpose of strengthening climate governance in Nigeria, the Framework provides for a Carbon Market Activation Policy. The objectives of this policy include the establishment of guidelines and procedures to enhance initiatives aimed at reducing Nigeria's greenhouse gas emissions while simultaneously promoting sustainable development. Along with the Carbon Market Activation Policy, the Climate Change Act provides for the development of Carbon Market Regulations(the "Regulations"). While the Regulations are yet to be enancted, they are designed to govern the carbon market and provide flexibility for carbon-related transactions. The Regulations will define the market mechanisms to be adopted by the Government for promoting and engaging in the voluntary carbon market. It will also set out rules for carbon project development, clarify the regulatory institutions responsible for the administration and oversight of the carbon market, and provide a framework for the implementation of Nigeria's obligations under the Paris Agreement, among other provisions.
Conclusion
The Framework marks a pivotal moment in Nigeria's climate governance journey. By providing a coherent policy and regulatory foundation for carbon market participation, the Framework emphasis Nigeria's readiness to engage competitively in global carbon markets. If successfully implemented, the Framework has the potential to position the country as a leading carbon market hub in Africa.
Footnotes
2 https://pavestoneslegal.com/regulatory-update-nigerias-carbon-market-approach/
3 https://pavestoneslegal.com/carbon-credits-in-nigeria-road-to-implementation/
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