Nigeria has a talent for sitting on fortunes it refuses to count.
This is not a new observation, nor a particularly clever one. It has been made so many times, in so many budget speeches and reports, that it has calcified into the kind of truth nobody acts on precisely because everyone already knows it. We sit on 37 billion barrels of proven crude reserves and import refined petroleum.
We produce more cassava than any country on earth and import starch.
We flare 6.6 billion cubic metres of associated gas every year, enough to power the national grid several times over, and hold conferences about energy poverty.
We generate biomass at a scale that dwarfs most of sub-Saharan Africa combined and burn it in the open air, unmetered, unmonetized, and unremarked upon.
The pattern is so familiar that it has graduated from national embarrassment to national folklore. We tell it the way other countries tell stories about weather — a thing that simply is, that happens to us, that no one is responsible for.
At some point, the gap between what Nigeria possesses and what Nigeria does with what it possesses stopped being a policy failure and became a personality trait.
But there seems to be a stir, however faint, in our carbon sector.
The global carbon removal market, which is the business of pulling greenhouse gases out of the atmosphere, verifying the removal, and selling credits to corporations and governments willing to pay for it, is projected to become one of the defining asset classes of the next two decades.
Africa sits on the raw materials, and Nigeria, specifically, has the biomass, agricultural waste streams, forestry cover, the flaring infrastructure begging to be converted, and a government that has now, on paper at least, committed to building a national carbon market. The underlying conditions are all here. They have been here, but as always, are we going to do anything with them before someone else does?
In February 2026, that question got its first answer. And it did not come from Lagos, as might be predicted.
Releaf Earth, a climate-tech startup operating a biochar facility in Iwuru, Cross River State, sold 190 tonnes of verified carbon removal credits to Salesforce.
The $250 billion American cloud company paid for them through a Swedish climate platform called Milkywire, verified against the Rainbow Standard, which is an ICVCM-approved, ICROA-endorsed carbon crediting programme that has certified over 80 projects and issued more than 400,000 credits globally, used by companies like Charm Industrial (which sold 100,000 tonnes to Google and a separate $53 million deal to the Frontier consortium); Exomad Green in Bolivia (the world’s largest biochar credit seller with 360,000 tonnes delivered); and Residual, a European carbon removal developer building premium biochar projects across multiple markets. It was Nigeria’s first industrial-scale carbon removal sale, and almost nobody here noticed.
The Framework
I will be the first to admit that Nigeria has a well-documented habit of producing impressive policy frameworks that never translate into functioning markets. However, the National Carbon Market Framework (NCMF), approved by President Tinubu in October 2025 ahead of COP30 in Belém, could easily be dismissed as another entry in that tradition. That would have been a reasonable assumption, but the manner and pace at which the National Council on Climate Change is moving to structure and operationalise the framework make it harder to dismiss this time.
As a framework, the NCMF seeks to operationalize the Climate Change Fund and the reinstatement of the National Council on Climate Change (NCCC) to the federal budget line. This means, for the first time, Nigeria’s climate governance apparatus has a guaranteed funding pathway through the annual FAAC allocation.
This matters because multilateral climate finance institutions have historically refused to commit capital to countries without strong regulatory frameworks and supporting institutional infrastructure. The NCCC’s budget restoration addresses that objection directly by providing a predictable, recurring funding mechanism that signals fiscal commitment to international partners and by creating an institutional anchor through which climate finance flows can be coordinated, tracked, and accounted for.
At its core, the framework is designed to govern the generation, authorization, transfer, and accounting of carbon credits for qualified projects. It also establishes regulatory clarity for credit issuance, creates procedural pathways to attract private capital into sectors identified under Nigeria’s updated Nationally Determined Contributions (which now target a 32% emissions reduction by 2035), and adopts a phased design.
This phased approach, together with the Financial Reporting Council of Nigeria’s new Sustainability Reporting Guideline (SRG 1) and its roadmap for mandatory IFRS S1 and S2 adoption by 2028, makes it possible to align carbon market activity with standardized corporate disclosure requirements. In particular, the voluntary market participation will lower the barrier to entry for project developers and corporate participants still building their carbon accounting capabilities, with a deliberate transition toward a domestic compliance regime that could include an emissions trading system and carbon pricing instruments.
While other factors like project pipeline depth and MRV infrastructure matter, the FG projects between $2.5 billion and $3 billion annually in carbon finance over the next decade. That number sounds ambitious, and it is. But even at 30% of that target, we are looking at close to $1 billion a year flowing into verticalized, sector-specific projects like clean cookstoves, biochar, renewable energy, methane capture, forestry, and sustainable agriculture that generate tradable credits on international markets. For context, that would rival several of Nigeria’s current non-oil export categories.
Additionally, the Minister of Finance, Wale Edun, has also announced plans for a quarterly Climate Finance Tracking Dashboard. This is particularly important because institutional investors and DFIs have been asking for exactly this kind of transparency mechanism for years. Its existence signals that the government understands what international capital requires, even if the implementation timeline remains characteristically unclear.
190 Tonnes from Iwuru
Releaf Earth did not start as a carbon company. It started as a food processing company that’s obsessed with cracking palm nuts efficiently at a smallholder scale. The company’s answer was Kraken, a patented de-shelling machine designed specifically for the smallholder palm varieties that dominate Nigerian farming. Kraken processes palm nuts at a 95% purity rate, well above the industry standard of 88%, and it has handled over 10,000 metric tonnes since inception. The kernels go to vegetable oil production, but the shells, on the other hand, go somewhere else entirely.
They go into a pyrolyser.
Pyrolysis heats biomass in the absence of oxygen, converting it into biochar — a carbon-rich, charcoal-like material that does not decompose. When buried in soil, it locks carbon away for centuries, possibly millennia, while simultaneously improving soil structure, water retention, and nutrient availability. Unlike traditional forestry offsets, which can be reversed by wildfire, illegal logging, or a change in government policy, biochar offers what the carbon removal industry calls a “physics-based guarantee of permanence.” That means carbon does not go back into the atmosphere because the chemistry will not allow it.
This is where Releaf Earth’s story shifts from agricultural innovation to climate finance. A 2024 pilot deployment in Cross River State delivered a 23-25% increase in crop yields for participating farmers. Statistically, the company projects a 50% increase in smallholder incomes through the combined effect of reduced fertilizer costs, improved harvests, and a new revenue stream through carbon credits that did not previously exist. Biochar produced by Releaf is returned to farmland through a distribution partnership with Thrive Agric, which works with over 500,000 farmers across Nigeria.
They track every tonne from its source biomass to its final soil application using Releaf Earth’s proprietary geospatial mapping tool called SITE.
By combining this geospatial traceability with Inertinite Gold Certification (the highest rating for carbon storage security) and third-party verification through the Riverse Registry, Releaf Earth has built the type of granular, auditable traceability that international buyers require and that most carbon projects in the world cannot provide.
The 190 tonnes of carbon removal credits sold to Salesforce at an estimated $150-$200 per tonne in February 2026 are modest in volume and early in what is likely a much longer delivery schedule.
Three things about this transaction deserve attention from Nigerian investors.
First, Nigeria is competing in the highest-value segment of the global carbon market. Durable carbon removal credits command multiples of what traditional avoidance credits fetch. For instance, biochar credits currently average around $187 per tonne while generic avoidance credits trade below $1.
The global carbon removal market is projected to become a trillion-dollar industry within two decades, and Africa — which generates over 1.4 billion tonnes of biomass annually — has a structural cost advantage that wealthier regions cannot replicate.
As a country, Nigeria has the feedstock, the labour economics, and now the first verified issuance to demonstrate credibility and position itself as a serious origin market for premium carbon removal credits.
Moreover, the economics extend well beyond carbon revenue. Releaf Earth’s biochar is returned to farmland as a soil amendment, delivering up to 23% increases in crop yields at a time when synthetic fertilizer costs are punishing smallholder farmers across West Africa.
The company projects a 50% increase in smallholder incomes through the combination of waste monetization and agricultural productivity gains.
This dual-return structure, combining carbon credit revenue on one side and agricultural uplift on the other, is what makes the model bankable rather than merely environmental.
Third, that investors like Y Combinator and Angaza Capital backed Releaf Earth means they affirm the embodied intelligence of the company’s approach to converting agricultural waste into a verifiable, tradable climate asset and their confidence in Nigeria’s regulatory trajectory to support it at scale.
Lagos’s big bet on carbon trading
For decades, Nigeria’s subnational governments have watched climate finance flow overhead like rain that never lands. In practice, federal frameworks absorb the attention drawn from multilateral negotiations and are run by agencies headquartered in Abuja, leaving the state governments to implement adaptation measures with budgets that cannot cover the cost of drainage, let alone decarbonization. Lagos, characteristically, has decided it wants to pioneer carbon market infrastructure at the subnational level.
Rather than depending on the federal carbon market architecture to trickle down, Lagos intends to build Africa’s first subnational carbon exchange modelled after California’s and position itself as the continent’s climate finance hub. The Lagos Carbon Exchange (LCX), anchored by the 80 Million Credit Float Project with GreenPlinth Africa, targets $1 billion in revenue across 15 years through the trading of 1.2 million certified carbon credits.
The next phase of Nigeria’s carbon market, Lagos is wagering, will come from subnational initiatives rather than constantly waiting for Abuja to build the infrastructure from the top down.
It is exactly the kind of bold positioning that can attract global attention and capital. Whether it translates into a credible, functioning exchange could reshape how international buyers, project developers, and institutional investors engage with Nigeria’s carbon market for the next decade.
However, credibility in the global carbon credit industry is built on verifiable institutional infrastructure, bolstered by transparent governance and internationally benchmarked standards. And the infrastructure, as of today, is not there.
There is no legislation establishing the Lagos Carbon Exchange as a legal or corporate entity. No operational rulebook has been published. In fact, the Monitoring, Reporting, and Verification (MRV) systems have not been publicly benchmarked against global standards like the ICVCM’s Core Carbon Principles. Without these foundations, credits traded on the LCX risk being discounted or outright rejected by the international buyers and institutional investors whose participation is essential for the exchange to generate the revenue Lagos is projecting.
This may sound obvious. Doesn’t every carbon exchange care about credibility and verification integrity? But the global carbon market industry operates on binary credibility, as seen in Zimbabwe with the Kariba REDD+ project where over 15 million credits were deemed excess and subject to cancellation after investigations revealed that baseline projections had vastly overstated avoided deforestation, and in Kenya, where KOKO Networks, one of Africa’s most celebrated clean-energy startups, collapsed overnight after the government denied it a Letter of Authorization under Article 6 of the Paris Agreement, leaving 15 million carbon credits in limbo and 1.5 million households without clean fuel access. Either your credits are accepted at face value by international compliance and voluntary buyers, or they trade at a discount that makes the entire exercise uneconomical.
There is no middle ground. Lagos has the political will and the scale to build something that works. But the legal and institutional infrastructure needs to precede the marketing and the public commitments that make it attractive for international capital to participate.
1.5T Naira and the capital trail
There is such craft in Nigeria’s emerging climate finance architecture that codifying it explicitly feels like a minor sacrilege. Still, there is an explicit strategy that explains why Nigeria’s climate finance trajectory appears to be accelerating, even if some aspects need further regulatory clarity and industry maturation. Stripped to the fundamentals of capital allocation, what does Nigeria’s green finance model look like, and where is the money flowing into?
To understand the playbook is to trace where it all started. In 2017, Nigeria issued a modest N10.69 billion, believed to be Africa’s first sovereign green bond backed by the World Bank and the Climate Bonds Initiative. The result of this issuance materially impacted how development finance institutions and partners see Nigeria’s climate ambition and the capital commitment that follows. While this significantly boosted international confidence especially as it financed 23 climate-aligned projects across NDC sectors, a second issuance in 2019 raised N15 billion and drew 220% oversubscription. Although this was essentially a validation of sustained investor appetite and triggered the third in 2025 which raised N50 billion, the nation’s climate finance architecture and institutional credibility have matured considerably during this period. Now the government is seeking IFC backing for a N1.5 trillion issuance—roughly $1 billion—which would be the largest climate-linked debt instrument Nigeria has ever attempted. While Nigeria’s green bond programme has always focused on sovereign issuances for climate-aligned infrastructure, it has consistently evolved its mandate, encroaching into emerging sectors like greentech and carbon removal that have direct impacts on Nigeria’s NDC 3.0 and the country’s goal of reducing greenhouse gas emissions by 47% before 2060.
Maintaining a stable of diversified climate finance instruments has also created resilience for Nigeria’s green economy proposition. This includes the $2 billion National Climate Change Fund, announced at Abu Dhabi Sustainability Week in January 2026, and is now being capitalized alongside a $500 million Climate Investment Platform for climate-resilient infrastructure. Whether these instruments deliver on their stated objectives is uncertain, but the fact that they attract the co-investment and endorsement of international partners like the IFC and UAE indicates that the institutional scaffolding for climate finance in Nigeria is being built at a pace that was not conceivable even three years ago.
Another higher upside potential is the blended finance activity now entering the market, with the IFC deploying an $80 million naira-denominated facility for Sun King Nigeria. Similarly, Abia State has joined a strategic alliance with FMDQ Group, FSD Africa, and Chapel Hill Denham for subnational climate finance instruments. Collectively, these developmental patterns of multilateral, sovereign, and private capital converging on Nigeria’s green economy are a signal that should not be lost on domestic investors and an invitation to position before the opportunity is priced by those already paying attention.
Where the risks are and what to watch
Nigeria’s institutional track record gives legitimate grounds for caution, and several things need to go right for this market to reach even a fraction of its stated potential.
The NCMF has been approved, but the Manual of Procedures, which explicitly states the operational rules for market participation, has not been released. No detailed strategy for attracting international buyers or establishing a trading platform has been published. Until these arrive, the framework remains a promise with a presidential signature on it. My view is that the technical work is more advanced than the public timeline suggests, particularly given the NCMF’s formal unveiling at Abu Dhabi Sustainability Week and Nigeria’s engagement with the Africa Carbon Markets Initiative registry infrastructure.
Then there is the question of oversight. Carbon markets live or die on integrity, as we have already seen what happens in Zimbabwe and Kenya when it is absent. As a result, Nigeria’s Carbon Market Activation Policy calls for a dedicated oversight body to enforce standards and coordination.
How that body is constituted, funded, and insulated from political interference in the next 12 to 18 months will be the single most important indicator of whether this market is real or performative.
The project pipeline is the third concern. Releaf Earth’s 190 tonnes is a proof of concept, not a market. Nigeria’s existing carbon project portfolio is dominated by clean cookstove projects, which are a valid but narrow category.
Scaling across energy, agriculture, forestry, waste management, and industrial decarbonization requires project development finance, technical capacity, and MRV infrastructure that does not yet exist at scale. The emergence of project preparation facilities and carbon credit aggregation platforms over the next 12 to 24 months will signal whether the pipeline is deepening or the Releaf Earth case study remains an impressive outlier.
Finally, there is the convergence that connects all of this to the broader investment landscape. The SEC’s sustainability disclosure guidelines, the NGX’s ESG reporting requirements, and the FRCN’s mandatory adoption of IFRS S1 and S2 by 2028 are creating an environment where corporate carbon exposure becomes a financial disclosure item.
Companies generating or purchasing carbon credits will need to account for these transactions within standardized frameworks that create compliance costs for laggards and competitive advantages for early movers. For carbon market participants, this disclosure regime will enforce corporate engagement with carbon accounting whether boards want it or not.
There’s still a long way left to run and too much institutional uncertainty to read much into Nigeria’s carbon market ambitions with full conviction. But something is different this time and it is worth acknowledging and watching closely.
Whether Nigeria builds a carbon market or merely announces one will depend on execution and institutional follow-through. We have never been short of ambition, but for the first time in a long while, the capital and proof of concept are converging in the same place, at the same time, in a global market that is not waiting for us to be ready.
The window of opportunity is open, the question is whether we walk through it or watch it close from the other side.
Dauda Abiola Sulaimon is a Senior ESG Analyst at Skalable
