Nigeria’s Green Turn: GHG Accounting, Climate Law & the Road to Net‑Zero by 2027

energyguardiansltd
Jun 24
3 min read

Written by: Energy Guardians

Last Updated: June 24, 2025

As Africa’s largest economy, Nigeria is stepping up climate action in a serious way. With the Climate Change Act (CCA) 2021, the government has set a hard line: by 2027, qualifying organisations must have measured and reported their greenhouse gas (GHG) emissions, aligning with legally mandated national carbon budgets. This is not just a policy, it is a shift toward climate accountability.

The Climate Change Act 2021: Core Highlights

Legal Framework for Net Zero: Signed into law in November 2021, the Act sets a legally binding path to net zero emissions by 2050–2070 and introduces carbon budgeting on five‑year cycles.
Regulated Sectors & Baseline Requirements: It applies to both public and private entities (with 50+ employees), who must:
- Establish a Climate Change Officer or sustainability desk
- Set annual baselines and monitor emissions
- Submit annual GHG reports to the National Council on Climate Change (NCCC).
Carbon Budget & Climate Change Fund: A five-year carbon budget is set by the Federal Ministries of Environment and Planning. Any missed target triggers internal reviews and potential sanctions on responsible officers. The Act also establishes a Climate Change Fund, financed by fines, carbon tax, fees, and international grants, to support mitigation and adaptation projects.

Who is Enforcing This Mandate?

National Council on Climate Change (NCCC): Chaired by the President, supported by the Vice President and DG, and including key Ministers and private sector reps. The NCCC oversees national climate strategy, carbon budgets, and regulatory guidelines.
NCCC Secretariat: A technical, scientific body, housed at the Presidency, responsible for enforcement, reporting reviews, and serving as an administrative backbone .
NESREA (National Environmental Standards & Regulations Enforcement Agency): Charged with environmental compliance and enforcement; likely to collaborate closely with the NCCC on GHG observations and penalties.
Federal Ministries of Environment & National Planning: Tasked with setting carbon budgets, developing the National Climate Change Action Plan (every 5 years), and issuing reporting guidelines.
Financial Reporting Council (FRC): Leading implementation of IFRS-aligned sustainability disclosures, with voluntary compliance expected by 2027 and penalties for greenwashing.

What Companies in Nigeria Must Do

By 2027, private and public entities (with 50+ staff) will be required to:

Appoint a dedicated Climate Change or Sustainability Officer
Measure emissions (at least Scope 1 and 2; possibly Scope 3 too)
Set baseline emission levels to serve as reference for carbon reduction
Prepare and submit annual emissions reports to the NCCC Secretariat
Align internal strategies with the National Climate Change Action Plan
Implement reduction measures, which may include carbon tax, carbon offset programs, or emissions trading.
Verify data; third-party checks may be mandated to ensure accuracy and reliability

Penalties for Non‑Compliance

Fines imposed by the NCCC for missed targets or false reporting, scaled to emissions impact and environmental/social harm .
Enforcement actions by NESREA: including stops orders, legal cases, and administrative penalties .
FRC penalties for misleading sustainable claims; particularly in financial disclosures.
Risks of legal or reputational damage, especially if NGOs or citizens bring litigation under the CCA.

Why It Matters?

Nigeria is among the first African nations embedding climate responsibility into hard law; signalling a regional shift toward corporate climate accountability. For businesses, climate risk is fast becoming a legal and financial liability, not just a moral one. Early adopters gain competitive edge through:

Access to green finance and carbon markets
Enhanced export prospects to ESG-driven markets
Better reputation and stakeholder trust

Final Word

With the 2027 deadline fast approaching, climate action in Nigeria is no longer optional; it is a legal imperative. The Climate Change Act 2021 has set the architecture. The NCCC, NESREA, FRC, and government ministries are gearing up to enforce it. And companies? They need to prepare now, if they want to avoid penalties and capitalize on the green transition.

Need help preparing your organisation for GHG accounting and reporting in Nigeria? Energy Guardians Limited is here to guide you through baselining, reporting, and climate strategy. Contact us to get started.