The CCA 2021 sets out a compliance framework1 for climate change obligations for different sectors in the Country including; the Ministries, Departments, and Agencies (MDAs), public entities, and private entities.
For MDAs, the CCA 2021, provides, among other things, for the establishment of a climate change desk to integrate climate change actions into their core mandate2. MDAs are also obligated to adhere to the annual carbon emission reduction targets3, in line with the national action plan and carbon budget provided under the CCA 2021. Where an MDA fails to meet its carbon emission reduction target, it shall be subjected to a review, and if found liable, its principal officers shall be sanctioned and may be fined as determined by the Council4.
In relation to the compliance obligations of Public Entities5, the CCA provides that the National Council may by regulations impose obligations relating to climate change on public entities6 and may vary or revoke any such obligations, where necessary. The CCA 2021 further provides obligations for Private Entities, whereby private entities with a minimum of fifty (50) employees are obligated to; put in place substantial measures to achieve the annual carbon emission reduction targets in line with the Action Plan and to designate a Climate Change Officer or an Environmental Sustainability Officer with the responsibility of submitting the annual reports on an entity's efforts at meeting its carbon emission reduction and climate adaptation plan7. By the CCA 2021, the Council may also require a private entity to prepare reports on the status of its performance of its climate change obligations and prescribe the period for reporting. Where a private entity fails to meet its target, it shall be liable to a fine determined by the Council, which shall rely on a system of Environmental-Economic Accounting with attention on the health impacts, impact on climate variation, and interruption or damage to ecosystem services.
Compliance Obligations of CCA 2021 on Oil and Gas Operators
From the foregoing, we observe that the CCA 2021 does not expressly/separately provide for obligations for oil and gas operators, hence oil and gas entities are categorized essentially as 'private entities' and the obligations mandated on such entities under the CCA 2021, by extension, applies to them as well. However, it is pertinent to highlight that in line with the provisions of the CCA 2021, the operations of players in the oil and gas sector are the most affected as private entities, given that they account for a substantial part of Nigeria's greenhouse gas (GHG) emissions.
Putting private sector emissions into perspective, about 75 million tonnes of Co2 equivalent a year is emitted by the oil and gas sector exceeding that generated by other sectors such as the power and transportation sector. The power sector is next in line with about 37.82 million tonnes of emissions in 2020 alone8. Under the CCA as provided above, these oil and gas operators (essentially private companies) will be provided with carbon budgets which they must comply with, or face penalties, which is not inclusive of the penalties to be imposed on them (oil and gas companies) for gas flaring as provided under the Petroleum Industry Act, 2021. Further, the CCA 2021 envisages the introduction of a carbon tax to be charged on carbon emitters aimed at reducing emissions and encouraging the use of environmentally friendly alternatives.
Footnotes
1 Part VI – OBLIGATIONS RELATING TO Climate Change. Sections 22 – 24 of the CCA 2021
2 Section 22 (1) Ibid
3 Section 22 (4) Ibid
4 Section 22 (5) Ibid
5 Section 23 Ibid
6 Section 23 (a) Ibid
7 Section 24 (1) (a)(b) Ibid
8 https://ourworldindata.org/co2/country/nigeria
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