COP28: Nigeria sets up committee to fast track national carbon plan

Nigeria is to set up a special committee to help draft a national carbon market strategy, President Bola Tinubu told the UN Climate Change Conference in Dubai Dec. 2.

Tinubu also called for more investment in decarbonizing the country's energy sector.

"The government is open for investment. To all of you potential investors, I give you the assurance that the government is in for the long haul [in energy transition]," he said.

Nigeria has so far been slow to develop a carbon markets framework.

"I've been working on the African Carbon Markets Initiative and what we found is there is a $2.5 billion opportunity for Nigeria to tap into," said Damilola Ogunbiyi, CEO of Sustainable Energy for All, a UN-backed fund, at the climate talks.

The new committee's draft plan is expected to include an emissions trading scheme, a carbon registry and a framework for high-integrity carbon credits as part of the wider voluntary carbon market.

The initiative "underscores our determination to address [Nigeria's] vast carbon potential" said Zacch Adedeji, chairman of the country's Federal Inland Revenue Service.

"Through the implementation of efficient policies and framework, this journey we embarked on goes beyond regulatory compliance," he said.

The Africa Carbon Markets Initiative was formed in November 2022 at COP27 in Egypt.

The partnership aims to harness Africa's largely untapped potential to contribute to the supply of carbon credits. Countries such as Kenya, Malawi, Gabon, Nigeria and Togo have already started collaborating with the ACMI to scale carbon credit production via voluntary carbon market activation plans.

Big funding ask

Nigeria has committed to achieving net-zero carbon emissions by 2060, but needs significant funding to advance its climate strategy.

"The amount of money needed for Nigeria to transition to net-zero in a climate friendly way is staggering," Ogunbiyi said. "This comes to a sum of $1.9 trillion between now and 2060. At least $410 billion of that will be above business as usual spending," she said.

Carbon markets and taxes help provide a source of revenue for governments to fund climate policies, while pressuring sectors required to comply to decarbonize their operations.

The largest such market, the EU Emissions Trading System, was valued at $750 billion in 2022. The global voluntary carbon market, meanwhile, was valued at around $2 billion, but is projected to grow to $40 billion by 2030.

Platts, part of S&P Global Commodity Insights, assessed EU Allowances for December 2023 at Eur72.49/mtCO2e ($78.89/mtCO2e) Dec. 1. This compared with China's compliance emissions price, which was valued at Yuan 71.84/mtCO2e ($10.10/mtCO2e) on Nov. 24, according to the Shanghai Environment and Energy Exchange.