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Nigeria’s push to become a major player in the global green economy has hit a critical junction, with legal experts warning that the newly unveiled National Carbon Market Framework (NCMF) 2024 lacks the necessary legal anchor to achieve its ambitious goal of generating $2.5 billion and 124.7 MtCO₂e in reductions by 2030.
The NCMF, signed to operationalise the 2021 Climate Change Act and align Nigeria with Article 6 of the Paris Agreement and the Voluntary Carbon Market (VCM), has been praised as a significant policy step toward monetising emissions reductions while advancing sustainable development.
However, a paper authored by Olasupo Shasore SAN, International Energy Negotiator and lead Partner in the Energy, Natural Resources and Climate law practice of ALP NG & Co, argues that this commendable policy ambition remains vulnerable because the framework is essentially a non-binding policy directive rather than a statutory regime.
It relies heavily on ministerial discretion and voluntary cooperation among stakeholders, a dependency on administrative goodwill that risks inconsistent application, weak compliance, and limited investor confidence.
Crucially, without statutory authority, essential mechanisms like Monitoring, Reporting, and Verification (MRV), dispute resolution, and sanctions lack the necessary legal force to ensure the credibility and accountability required for high-integrity carbon transactions.
The proposed Decarbonisation Bill (DB.) is posited as the critical solution to close this “policy-to-practice gap,” transforming climate delivery into a legally binding and enforceable system.
This Bill would establish a legally-empowered National Decarbonisation Authority (NDA), moving Nigeria from a policy coordination model to a rule-of-law-based governance structure. The NDA would be vested with unified authority to centralise oversight, licensing, compliance, and enforcement, thereby addressing the institutional fragmentation and regulatory competition that arises from the NCMF adding new coordinating bodies—like the Carbon Market Governance Committee—alongside existing ones, such as the National Council on Climate Change (NCCC).
Furthermore, the Decarbonisation Bill provides the essential legal scaffolding for market integrity, granting the NDA statutory control over MRV operations, mandating third-party verification, satellite monitoring, and creating a public national carbon registry. These provisions are vital to ensure that Nigeria’s carbon credits meet ICVCM standards and avoid the integrity risks and double-counting that undermined several early African VCM projects.
The financial framework also demands legal certainty. While the NCMF promises fiscal incentives, these remain subject to executive discretion. The Decarbonisation Bill, by contrast, seeks to institutionalise predictable financing mechanisms by establishing the National Green Transition Fund (NGTF), capitalised by statutory levies, green bonds, and first-loss provisions to de-risk private capital. This structured approach ensures that fiscal mechanisms survive political transitions, a key weakness of the current NCMF. Beyond finance, the Bill transforms community protection from a policy commitment into a legal right by embedding a Just Transition Fund, mandating transparent benefit-sharing structures, local reinvestment, and livelihood programs.
This legal codification ensures that decarbonisation remains equitable and politically stable, safeguarding vulnerable communities.
Crucially, the NCMF’s heavy reliance on the voluntary market is noted, missing the vast, higher-value, and stricter oversight of the regulated (compliance) carbon market in line with global trends.
Moreover, a major strategic gap in the NCMF is its insufficient address of Methane (t{CH}_4)—the second most potent greenhouse gas—despite Nigeria’s abundant sources across the oil and gas value chain and landfills. The Decarbonisation Bill is expected to inclusively tackle methane emissions, capture, and management toward quantifiable improved outcomes, capturing a broader carbon market with untapped potential. Finally, while the NCMF’s oversight remains executive-dominated, the Decarbonisation Bill mandates democratic accountability by requiring annual parliamentary reporting by the NDA and public disclosure of registry data and revenue flows, which is essential for building investor and citizen confidence.
By providing statutory authority for ITMO issuance, transfer, and tracking, the Bill also enhances Nigeria’s global standing, making its mitigation outcomes bankable and exportable under international carbon markets. In essence, while the NCMF provides the strategy, the Decarbonisation Bill is the regulatory propulsion needed to activate the market and unlock the vast pools of international climate and carbon finance seeking credible, rule-based investment destinations.
