The National Carbon Market Activation Policy (NCMAP), supported by the Climate Change Act 2021, establishes a comprehensive ecosystem to catalyze high-integrity carbon investments.

Institutional Framework and Governance
National Council on Climate Change (NCCC): The apex regulatory body chaired by the President. It oversees policy implementation, approves regulations, and ensures alignment with Nigeria’s Nationally Determined Contributions (NDCs).
Secretariat / Carbon Market Office (CMO): Acts as the administrative and technical arm. It serves as the Designated National Authority (DNA), manages the National Carbon Registry, and authorizes the transfer of Internationally Transferred Mitigation Outcomes (ITMOs).
Nigeria Revenue Service (NRS): Responsible for developing and implementing the carbon tax mechanism and managing fiscal incentives.
Intergovernmental Committee on Carbon Market Activation (IGCCMA): Coordinates the whole-of-government approach and leads negotiations for carbon project development.

Market Mechanisms:
The regulation adopts a hybrid approach to carbon trading:
Voluntary Carbon Market (VCM): Nigeria aims to scale high-quality credits by requiring a No-Objection letter for all VCM projects. Projects seeking Corresponding Adjustments must meet rigorous Article 6 criteria to prevent double counting.

Article 6 Framework: The government manages bilateral transfers (Article 6.2) and a centralized crediting mechanism (Article 6.4).

Compliance Markets: A medium-to-long-term plan includes a mandatory Carbon Tax and Emissions Trading System (ETS) for high-emitting sectors.

Project Eligibility and Exclusions:
The policy specifies that project eligibility is strictly tethered to Nigeria’s climate ambitions, particularly the NDC priority sectors (conditional target).

Regarding exclusions and mitigating the overselling risk, the framework provides the government with the authority to manage the negative list to guide market players and prevent the registration of undesirable project types.

Authorization:
The policy states that Article 6.2 and 6.4 activities will be authorised by Nigeria, subject to meeting the regulatory requirements and eligibility criteria established by the country.

Project Development Cycle:
To be included in Manual of Procedures

Registry:
- The National Carbon Registry will be established as a centralized repository to track all existing and future carbon market activities in Nigeria, covering both voluntary and compliance-based mechanisms and to record the issuance, holding, transfer, and retirement of carbon credits or mitigation outcomes.
- It will be managed by the Secretariat of the NCCC.
- The registry will be designed to align with international protocols and will provide real-time information on credit availability and transactions.

Share of Proceeds:
For activities under Article 6.4 of the Paris Agreement, the SOP is mandatory and follows international requirements for adaptation and administrative costs. For Article 6.2 and Voluntary Carbon Market (VCM) activities, Nigeria will establish its own guidelines, with the SOP potentially being collected in kind (a percentage of the credits generated) or as a financial levy on credit sales.

Grievance mechanism:
Nigeria will implement rules and procedures allowing carbon market participants and affected communities to appeal government decisions on credit issuance, authorization, or adjustments.

Benefit sharing:
The Carbon Market Regulations will establish fair benefit-sharing by specifying benefit types, carbon rights, and allocation methods like direct payments or managed funds. It is designed to incentivize stakeholders, particularly forest management communities, to support emission reduction and removal projects.

Fees, penalties and levies:
The Carbon Market Regulations will establish fair levies for the share of proceeds and administrative fees commensurate with government costs. A public, periodically revised fee schedule will ensure transparency and predictability for market participants. Additionally, the framework will define specific activities that attract penalties to ensure compliance.

Fiscal Incentives:
Nigeria is implementing a green fiscal policy to provide clear economic signals that encourage private sector participation in emission reduction projects. Under the Climate Change Act 2021, the government intends to offer a variety of tax-based incentives, including potential VAT and income tax exemptions on carbon credits and associated revenues for a period of up to ten years. Additionally, the framework considers accelerated capital allowances (ACA) for assets used in carbon reduction, such as renewable energy installations, and allows companies to deduct research and development (RD) expenses related to low-carbon technologies from their taxable income. These incentives are designed to ensure the financial viability of climate projects while aligning with Nigeria's broader mitigation goals.

Validation and Verification Body:
According to the Nigeria Carbon Market Activation Policy, a Validation and Verification Body (VVB) must be (i) accredited by an acceptable carbon standard and (ii) approved by the National Council on Climate Change (NCCC) to operate within the framework.

Recognition of methodologies by regulation:
The framework requires participants in Nigeria's Voluntary Carbon Market (VCM) to adhere to recognized international standards, specifically naming Gold Standard (GS), Verified Carbon Standard (VCS), the Climate, Community Biodiversity (CCB), and its associated methodologies.

Registration of the PD or project with the national registry for VCM and Article 6:
Both project developers and projects must be registered with the national registry for both the Voluntary Carbon Market (VCM) and Article 6 activities.

Approval for listing, issuance, trade, authorisation and corresponding adjustment:
Nigeria's framework requires specific government approvals and oversight at every stage of the carbon credit lifecycle to ensure environmental integrity and alignment with national climate goals.

Nigerian Carbon Market Activation Policy

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An aim to achieve a quantifiable outcome within a given time-frame, set by an institution such as a national government.

Policy instruments are techniques or tools used by governing authorities to promote certain policies in order to achieve predetermined goals. Put simply, instruments are how a government tries to achieve its goals, with this taxonomy being focused on national policy instruments.

Risk is the potential for adverse consequences resulting from the dynamic interplay between (climate-related) hazards, exposure, and vulnerability of affected human or ecological systems.

Groups  of people who are adversely affected by climate change or the response to it

A set of principles, processes, and practices that build economic and political power to shift from an extractive economy to a regenerative economy.

Justice is the ethical and political framework that addresses fairness, including issues of responsibility, rights, and structural inequity.

Renewable energy means all forms of energy produced from renewable sources in a sustainable manner.

Fossil fuel is a generic term for non-renewable energy sources such as coal, fossil gas, and oil (including crude oil, and petroleum products), that can be used for electricity and heat generation. Fossil fuels are hydrocarbons formed from pressurised and heated organic material buried over millions of years.

Molecules in the atmosphere that play a key role in the greenhouse effect by trapping heat radiating from Earth’s surface.

Area of the economy in which actors engage in identical or related activities.

In human systems, the process of adjustment to actual or expected climate change and its effects, in order to moderate harm, increase resilience or exploit beneficial opportunities. In natural systems, the process of adjustment to actual climate change and its effects; human intervention may facilitate adjustment to expected climate change and its effects.

The management and allocation of funds, assets and investments to meet various objectives

People who are less able to respond to the effects of climate change due to having limited financial or physical assets

A tax advantage is a fiscal incentive where the government reduces or exempts selected activities, goods or actors from taxes.

A loan is a policy instrument where funds are provided to a borrower with the expectation of repaying the principal plus interest.

A subsidy is a direct or indirect payment to individuals or businesses, typically provided as a government cash payment or a specific tax reduction.

Compulsory, required payments to the government that are levied more-or-less in proportion to the services provided. Fees and charges range from entrance fees to national parks, charges on land-based sewage discharge.

Financial support to help individuals manage the effects of unexpected events, securing their livelihoods and increasing the resilience of people and businesses to the changing climate. It’s especially vital in developing regions where everyday risks, climate-related weather extremes, or crop failures can push people into poverty. Without insurance, people may have to resort to selling assets or cutting consumption to cope with losses.

Tradable permits are market-based tools that grant permission for specific activities, frequently used to regulate emissions. These permits can be issued within a trading system to manage environmental impacts.

Codes and standards are regulatory instruments that specify minimum standards to protect health and safety. This ranges from performance standards, which prescribe outcomes while allowing flexibility to achieve compliance, to the more prescriptive approach of technology-specific standards.

A ban is a legal action that prevents the sale or supply of a product or service, or that recalls a product from the market. Examples are bans on SF6, greenwashing, fossil fuel advertisement or single-use plastics.

Financial actors and resources that are primarily directed towards climate change mitigation, adaptation and compensation.

Finance that is primarily directed towards climate change mitigation, including greenhouse gas emissions reduction and enhancing the sinks of greenhouse gases.

Dedicated pool of financial resources for climate-related projects.

A financial institution that manages a country's currency and can promote climate-related initiatives through green monetary policy and other means.

A company that is owned wholly or partially by the state, typically operating in key sectors.

A target to reduce the prevalence of a greenhouse gas over a specific time frame

A commitment to balance GHG emissions with removal by a certain point in time, effectively reducing the net emissions to zero

Aligning the skills of the workforce with the requirements of the just transition.

Either money or something of monetary value is transferred between two or more organisations, people or countries.

Conditions that enhance the feasibility of adaptation options. Enabling conditions include finance, technological innovation, strengthening policy instruments, institutional capacity, multi-level governance and changes in human behaviour and lifestyles.

Actions or measures to adapt terrestrial systems to climate change.

Actions or measures to adapt freshwater systems to climate change.

Actions to adapt human health, healthcare systems and well-being to climate change.

Coastal zone and marine-related actions and measures to adapt and increase resilience to climate change

Actions and measures to adapt and increase resilience of societies and the economy to climate change.

Actions or measures to adapt freshwater, coastal and marine systems to climate change.

The release of heat-trapping gases, primarily from human activities such as burning fossil fuels, agriculture and industry.

A long-lived, colourless gas, chiefly emitted from fossil fuel combustion, deforestation and cement production.

A potent, short-lived greehouse gas, largely released from livestock, fossil fuel extraction and waste management.

Replacing technologies that burn fossil fuels directly with alternatives powered by electricity.

Actions to reduce emissions in energy generation and supply.

Risks to the ecosystem health of the marine environment, including ocean warming, ocean acidification, and ocean deoxygenation, harming biodiversity, species health, ecosystem services, and coastal community livelihoods.

Extreme weather refers to events where a weather variable exceeds (or falls below) a threshold. Meaning it is significantly different from the average or usual weather pattern.

A drought is an extended period of unusually dry weather marked by a significant and sustained lack of precipitation, falling below a specific threshold over a large area for more than a month

Terrestrial means "of the earth" and relates to the risks to ecological system that includes all living organisms and their interactions within land-based environments, such as forests, grasslands, and deserts.

Social protection systems consist of policies that help people manage social risks in order to prevent poverty and maintain decent incomes and living standards

Energy derived from biological compounds that are renewable due to their short life cycle within the carbon dioxide cycle.

Social inclusion is the process of improving the terms on which individuals and groups take part in society—improving the ability, opportunity, and dignity of those disadvantaged on the basis of their identity.

Oil is a combustible liquid fossil fuel composed mainly of hydrocarbons, occurring as crude oil and refined into petroleum products such as petrol, diesel and kerosene.

Fossil gas, commonly known as natural gas, is a fossil fuel consisting chiefly of methane with smaller amounts of other hydrocarbons and trace gases, found in underground deposits.

People with different national or cultural traditions from the dominant population

Social and cultural groups that share collective ancestral ties to the lands and natural resources where they live, occupy or from which they have been displaced

Work that is productive and delivers a fair income, security in the workplace and social protection for all, better prospects for personal development and social integration, freedom for people to express their concerns, organize and participate in the decisions that affect their lives and equality of opportunity.

People whose health, both mental and physical, makes them more vulnerable to the effects of climate change

Jobs that contribute to preserving or restoring the environment. We include jobs which require a high amount of green skills or which spend much of their time on green activities, as well as jobs transforming polluting industries.

People who have left their homes, whether through force, voluntarily, or a mixture of both

woman and genders outside of the gender binary

Any compulsory, unrequited payment to the government levied on corporations or individuals. This can be for environmental reasons, such as introducing a Carbon tax to set a price that emitters must pay for the greenhouse gases they emit.

Activities of industries that extract natural resources, such as mining, oil, and gas, for commercial use.

The activities of industries involved in the production, distribution, and sale of energy, including electricity, gas, and renewables.

This sector involves managing waste treatment, sanitation, pollution control and environmental cleanup.

Activities that involve planning, designing and building infrastructure, residential, and commercial structures.

This sector involves the wholesale and retail selling of goods.

This sector involves activities to move goods and people, alongside the storage of products.

Activities that provide lodging, food, and entertainment services to guests, including hotels, restaurants, and resorts.

This sector provides communication services, software development, and IT solutions.

This sector involves activities that impart knowledge and skills to individuals, including formal schooling, vocational training and educational support.

Activities of government agencies and institutions that provide public services, enforce laws and manage public resources.

This sector includes firms and individuals offering specialised expertise in fields such as law, accounting, consulting, science and engineering.

Activities of businesses and institutions that provide financial services and products to individuals and organisations.

Activities that involve the cultivation of crops and raising of livestock for food, fibre, and other products essential for human life and industry.

Activities that relate to the production of goods and services from forests.

Activities involving the catching, processing, and selling of fish for food, recreation, and industry.

This sector involves the distribution, treatment, and conservation of water resources.

the fair distribution of risks and opportunities of climate change and the transition to a regenerative economy, cognisant in particular of disproportionate impacts on vulnerable communities and the working class

Procedural justice means ensuring that decision making is safe, transparent and inclusive, emphasizing the agency and influence of vulnerable groups and those most impacted.

Climate change can have a range of impacts on technological system. Extreme weather events can cause infrastructure failures like power outages or damage to roads and bridges, as well as the impacts from waste following natural disasters. Human activities also cause technological impacts, such as the risks posed by oil spillage and leaks.

Any substance with chemical properties that can cause physical harm to people or damage the environment, including ammonia, carbon monoxide, phosphine, chlorine, arsenic, cadmium, mercury, pesticides, dioxins, microplastics, benzene, asbestos, aflatoxins, fluoride, methanol, and toxins from marine sources.

Climate change impacts our society by disrupting the natural, economic and social systems we depend on. Physical hazards and underlying vulnerabilities can lead to increased resource competition for food and water, which can heighten the risk of conflict.

Slow onset events evolve gradually from incremental changes over many years or from increased frequency or intensity of recurring events. As defined in the Cancun Adaptation Framework (2010), slow onset events include risks and impacts from rising temperatures, desertification, biodiversity loss, land and forest degradation, glacial retreat, ocean acidification, sea level rise, and salinization.