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BY SEUN TIMI-KOLEOLU AND OMODELE FATODU
As the 30th United Nations Climate Change Conference (COP30) convenes in Belém, Brazil, it presents an opportunity to examine Nigeria's legal and policy measures relevant to clean-energy and climate-aligned activities. Key developments include the approval of the National Carbon Market Framework, the establishment of the Climate Change Fund under the Climate Change Act 2021 (“CCA”) and growing regulatory attention on renewable-energy and waste-to-energy projects.
For investors, and companies, these developments affect project structuring, licensing, environmental compliance, and participation in carbon markets. Understanding the legal and regulatory landscape is essential to identify opportunities, ensure compliance, and mitigate risks in Nigeria's evolving clean-energy sector.
KEY DEVELOPMENTS AHEAD OF COP30
National Carbon Market Framework: Approved in October 2025, this framework provides formal rules for the registration, issuance, and verification of carbon credits. It establishes a national carbon registry, mandates monitoring, reporting, and verification (MRV) protocols, and enables benefit‑sharing mechanisms for community and ecosystem-based projects. This framework lays the foundation for Nigeria's structured participation in carbon markets.
Climate Change Fund (the “Fund”): Established under the CCA, the Fund channels both public and private climate finance into mitigation and adaptation initiatives. The Fund is expected to support clean-energy projects, ecosystem restoration, and other climate-aligned interventions by leveraging grants, public contributions, and potential carbon-related revenue. In November 2025, at COP30, the Vice-President, Senator Kashim Settima, stated that through the National Carbon Market Framework and the Fund, the government aims to mobilise up to $3 billion annually in climate finance. This will be reinvested in projects such as community-led reforestation, blue carbon projects, and sustainable agriculture.
National Council on Climate Change (NCCC): Created under the CCA, the NCCC coordinates Nigeria's climate strategy, oversees the Climate Change Fund, and sets national priorities for mitigation and adaptation. It plays a central role in approving projects eligible for carbon credit registration and ensuring alignment with national climate‑change objectives.
Nature-Based Climate Solutions: Under S.27 of the CCA, the NCCC is required to promote and adopt nature-based solutions to reducing greenhouse gas emissions and mitigating climate change issues in Nigeria. In 2025, the NCCC adopted “Amplifying Nature-Based Climate Solutions” as its theme for the year, with a technical site visit to mangrove forests in the Niger Delta to assess restoration and conservation opportunities. The Climate Change Act also provides for the establishment of a REDD+ registry for forest carbon projects.
Clean-Energy Deployment: Nigeria's Renewable Energy Master Plan establishes targets for solar, wind, biomass, and other renewable technologies, aiming to significantly increase the share of renewables in electricity consumption by 2025. In addition, the Revised National Energy Policy and the Energy Commission of Nigeria encourage the deployment of biomass and waste-to-energy technologies as part of a circular economy strategy. These frameworks collectively promote diversified renewable-energy development beyond traditional solar and wind, encompassing distributed generation, biomass, and waste-to-energy solutions.
REGULATORY AND LEGAL CONSIDERATIONS FOR CLEAN-ENERGY PROJECTS
As Nigeria's regulatory landscape for clean-energy and climate-aligned projects becomes more increasingly structured, and understanding the applicable frameworks is critical for project development and investment. Key considerations include:
The Nigerian Electricity Regulatory Commission (NERC): The Electricity Act 2023 clarifies licensing obligations for electricity generation, including waste-to-energy and other renewable-energy facilities. Developers are required to obtain approvals at both federal and state levels, particularly when projects involve grid interconnection or the sale of electricity to industrial off takers. The NERC regulates licensing, metering, data reporting, and tariff approval. Compliance with NERC regulations is increasingly a prerequisite for financing, especially when projects involve power sales to utilities or industrial clients.
Environmental & Social Compliance: Waste-to-energy projects and other energy generation projects can have significant environmental and community impacts. Developers are required to conduct Environmental Impact Assessments (EIAs) and prepare Environmental and Social Management Plans (ESMPs), ensuring alignment with standards such as the IFC Performance Standards.
Climate Legislation and Carbon Markets: Under the CCA, corporate actors in the clean-energy space must consider national climate‑risk strategies and long‑term carbon planning. Projects that feed into, or derive benefit from, Nigeria's carbon-market framework must align with the planning and reporting processes overseen by the NCCC. These include securing a No‑Objection Certificate from the NCCC before carbon credits can be issued or transferred and registering projects in the national carbon registry. Developers must implement benefit-sharing mechanisms, clarify carbon ownership rights, and include dispute-resolution processes in contracts. Failure to comply can result in credit revocation or financial penalties.
Data Protection and Monitoring: Projects that use digital platforms or remote monitoring fall under the Nigeria Data Protection Act 2023 (“NDPA”). Under the NDPA, Companies must implement safeguards for operational and personal data, including privacy-by-design, cross-border transfer compliance, and cybersecurity measures.
OPPORTUNITIES IN NIGERIA'S CLEAN-ENERGY TRANSITION
Nigeria's regulatory and policy shifts open up several opportunities in the clean-energy space. Waste-to-energy, solar, and other distributed renewable solutions are gaining traction as commercially viable options. Waste-to-energy projects address multiple challenges simultaneously by supporting electricity generation, improving urban waste management, and contributing to emissions reduction.
By converting waste into electricity and generating carbon credits, such projects address pressing urban challenges while generating multiple revenue streams. Waste-to-energy initiatives contribute to strong ESG outcomes by reducing environmental impacts, improving urban waste management, and contributing to emissions reduction. Integrating regulatory compliance and carbon-market participation into such operations strengthens project viability and investment appeal, particularly when attracting socially responsible investors, as such projects promote ecological integrity, transparency, and alignment with national climate goals.
Key avenues for creating value include:
Diversified Revenue from Waste-to-energy: Companies can generate revenue by selling electricity to industrial off takers or distribution companies, receiving tipping fees for processing waste, and generate additional revenue from the sale of carbon credits.
Carbon Projects and Finance: Companies can generate revenue by registering eligible projects and issuing carbon credits that can be sold once verified. Access to concessional finance or blended funding can further improve project returns.
Strategic Partnerships: Companies can secure steady income by collaborating with government authorities on waste management, renewable energy, or nature-based initiatives.
Solar and Distributed Renewables: Companies can generate revenue from Power Purchase Agreements (PPA) with commercial and industrial users, solar farms, rooftop and off-grid generation, and embedded generation solutions.
CONCLUSION
COP30 provides a backdrop to Nigeria's evolving regulatory and policy framework for clean-energy and climate-aligned projects. Understanding the legal and regulatory environment is essential for investors, companies, and legal advisers to structure projects effectively, comply with applicable laws, and capitalise on emerging opportunities.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
