Nigeria Authorises First Article 6 Carbon Credits Under Paris Agreement

By  Johnson Emmanuel

Nigeria has issued its first Article 6 Letter of Authorisation under the Paris Agreement, enabling the generation and international sale of carbon credits from clean cooking projects.

The approval, granted by the National Council on Climate Change (NCCC), allows clean cooking company BURN and its partners to generate and transfer carbon credits tied to the distribution of fuel-efficient cooking stoves across Nigeria.

The authorisation unlocks the potential issuance of 5.2 million carbon credits linked to emission reductions from cleaner household cooking technologies. These credits may be sold through the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA), global aviation emissions offset programme.

The decision marks Nigeria’s formal entry into the international carbon credit market under the cooperative mechanisms established by Article 6 of the Paris Agreement.

DECISION HIGHLIGHT

The NCCC has issued Nigeria’s first Article 6 Letter of Authorisation, enabling 5.2 million carbon credits from clean cooking projects to be transferred internationally through the CORSIA.

Omotenioye Majekodunmi, Director-General (DG) of NCCC, said that the approval demonstrates Nigeria’s commitment to building a credible carbon market. According to Majekodunmi, “Nigeria is committed to building a transparent and high integrity carbon market that channels climate finance into real development outcomes for our people.”

Peter Scott, Founder and Chief Executive Officer of BURN, described the approval as a milestone. Scott said the authorisation marks “a significant step forward in our mission to expand access to clean cooking solutions for households across Nigeria.”

DECISION MEMO

Nigeria’s entry into the Article 6 carbon market represents a strategic attempt to convert climate policy commitments into financial flows.

Carbon markets allow countries or companies to generate tradable credits by reducing greenhouse gas emissions. Under Article 6 of the Paris Agreement, these credits can be transferred internationally and counted toward climate mitigation commitments by purchasing countries or corporations.

For Nigeria, the authorisation signals the operationalisation of its emerging carbon market architecture. The government has recently introduced the Nigeria Carbon Market Activation Policy and approved a national framework intended to attract climate investment.

The clean cooking sector provides a practical entry point for this strategy. Roughly 80 percent of Nigerian households rely on firewood or charcoal for cooking, creating a major source of deforestation, indoor air pollution and carbon emissions.

Projects that distribute efficient cooking appliances reduce fuel consumption and emissions. These reductions can be quantified and converted into carbon credits.

However, the financial logic of carbon markets extends beyond environmental outcomes. For host countries such as Nigeria, the mechanism offers a pathway to attract climate finance without relying solely on concessional international funding.

Majekodunmi framed the approval as part of Nigeria’s broader strategy to build a credible carbon trading ecosystem. According to Majekodunmi, the authorisation reflects the country’s readiness to participate responsibly in international carbon markets.

Scott emphasised the operational dimension of the project, linking the carbon market mechanism to expanded distribution of efficient cooking appliances.

Yet the decision also raises policy questions about governance and verification. Carbon markets have historically faced criticism over transparency, measurement accuracy and the risk of double counting emission reductions.

Nigeria’s decision therefore places the credibility of its emerging carbon market framework under early international scrutiny.

DATA BOX

Article 6 carbon credits authorised: 5.2 million credits

Clean cooking reliance in Nigeria: about 80 percent of households

Carbon credit sales channel: Carbon Offsetting and Reduction Scheme for International Aviation

Investment by BURN in Nigeria: over $9.6 million

Clean stove production capacity in Kano facility: about 40,000 units per month

International framework used: Article 6 of the Paris Agreement

WHO WINS / WHO LOSES

Clean energy companies operating in Nigeria stand to benefit from access to international carbon credit markets.

Households adopting fuel efficient cooking technologies may gain from lower fuel costs and reduced indoor air pollution.

International buyers of carbon credits, particularly aviation companies participating in the CORSIA, gain access to emission offsets tied to projects in emerging markets.

Traditional biomass fuel supply chains, including charcoal and firewood markets, could face gradual demand erosion if clean cooking adoption expands.

POLICY SIGNALS

The authorisation signals Nigeria’s intention to position carbon trading as a new channel for climate finance.

It also reflects an emerging policy shift toward linking environmental programmes with investment mechanisms rather than purely regulatory approaches.

More broadly, it indicates that the NCCC is moving from policy formulation into operational implementation of Nigeria’s carbon market framework.

INVESTOR SIGNAL

Nigeria’s entry into Article 6 carbon markets introduces a new category of investable climate assets linked to emission reduction projects.

Investors focused on climate finance, renewable energy and environmental technologies may increasingly view Nigeria as a destination for carbon credit generating projects.

The development also signals potential growth in sectors such as clean cooking technology, renewable energy distribution and carbon verification services.

RISK RADAR

Verification risk remains significant. Carbon markets depend heavily on accurate measurement of emission reductions and credible certification systems.

Policy risk also exists. Carbon credit markets remain subject to evolving international rules under the Paris Agreement framework.

Market risk is another factor. Carbon credit prices can be volatile and sensitive to regulatory changes in international emissions trading systems.

Finally, implementation risk persists. Expanding clean cooking adoption across millions of households requires distribution infrastructure, behavioural change and sustained financing.