Climate policy · Nigeria

Net zero in Nigeria: the Climate Change Act, the Energy Transition Plan and what they mean for business

Net zero means cutting greenhouse gas emissions as far as possible and balancing whatever remains with removals, so that the net amount added to the atmosphere is zero. Nigeria has committed to reach net zero by 2060, and two instruments set out how: the Climate Change Act 2021 and the Energy Transition Plan.

Most coverage treats these as government matters. They are not only that. The Climate Change Act already places duties on private companies with 50 or more employees, and from 2028 public interest entities must disclose their climate targets and plans under IFRS S2. This post explains all three.

What does net zero mean?

Net zero is the point where the greenhouse gases an organisation or country releases are balanced by the gases it removes from the atmosphere. The net zero meaning is about the balance, not about reaching literally zero emissions.

In practice, reaching net zero emissions means deep cuts first, from cleaner power, efficiency and less fossil fuel, and then removals, such as forests or carbon capture, for the emissions that are hardest to eliminate. Carbon neutral and carbon neutrality are often used to mean the same thing, though some organisations use them for offsetting alone.

Decarbonization is the process; net zero is the destination. A net zero target sets the date, and a transition plan sets out how to get there.

What is Nigeria's net zero target?

2060. Nigeria committed at the COP26 climate summit in Glasgow in November 2021 to reach net zero by 2060, and the Climate Change Act passed the same month sets a net zero target window of 2050 to 2070.

The two are consistent: 2060 sits inside the Act's window. The UN Environment Programme's summary of the Act records both the 2050 to 2070 objective and the 2060 commitment. The Energy Transition Plan then sets out the route for the energy system.

Instrument	Year	What it sets	Who it binds
COP26 commitment	2021	Net zero by 2060	The federal government, internationally
Climate Change Act	2021	A 2050 to 2070 net zero target, a carbon budget, an action plan and the National Council on Climate Change	Government bodies, and private entities with 50 or more employees
Energy Transition Plan	2022, updated 2024	Universal energy access by 2030 and net zero by 2060 across five energy sectors	A government plan; it guides policy and investment rather than placing duties on companies
FRC adoption of IFRS S1 and S2	Amended 2026	Mandatory climate disclosures, including targets and transition plans	Public interest entities from 2028, SMEs from 2030

What is the Climate Change Act 2021?

It is Nigeria's main climate law, signed on 18 November 2021. It sets the net zero target window, establishes the National Council on Climate Change, and requires a national climate change action plan and a five-year carbon budget.

The UNEP summary sets out its main parts. The carbon budget caps the emissions the country can produce over each five-year period, with annual objectives, and both it and the action plan must be validated by the Federal Executive Council.

The Act also creates a Climate Change Fund. UNEP's legal database holds a copy of the full text.

What does the Climate Change Act require of businesses?

Any private entity with 50 or more employees must put in place measures to meet the annual carbon emission reduction targets in the national action plan, and designate a Climate Change Officer or Environmental Sustainability Officer to report on its progress. Entities that fail to meet their targets may be fined.

These duties come from section 24 of the Act, as summarised by PwC Nigeria and KPMG Nigeria. In practice, three things follow for a company of that size:

Someone has to own it

The Act expects a named officer, not a committee, to report on climate measures.

Reporting is annual

The officer reports the organisation's efforts to the Council's secretariat each year.

You need numbers

You cannot show progress against an emission reduction target without measuring your emissions first.

How actively these duties have been enforced is a separate question; the targets depend on the action plan and carbon budget the Council sets. But the obligation is in the law, and a company that already measures its emissions is ready whichever way enforcement goes.

What is the National Council on Climate Change?

The body the Act created to run Nigeria's climate policy. It is chaired by the President, implements the national action plan, and receives the climate reports that private and public entities must submit.

The Council's secretariat is where a Climate Change Officer's annual report goes. Its official site is natccc.gov.ng; the Council also published Nigeria's 2024 National Inventory Document, the country's official record of its emissions.

What is the Nigeria Energy Transition Plan?

It is the government's plan for reaching net zero in the energy system by 2060, launched on 24 August 2022. It covers five sectors: power, cooking, oil and gas, transport and industry, and treats natural gas as a transition fuel.

According to the Energy Transition Plan's official site, the plan aims for universal energy access by 2030 and net zero by 2060, with gas providing baseload power and helping close the clean cooking gap along the way. The World Bank records the launch date.

The original costing put the energy transition in Nigeria at about $1.9 trillion of spending up to 2060, including about $410 billion above business-as-usual. The November 2024 update re-estimates the investment needed at about $500 billion and reports $16.1 billion in funding commitments to date.

Unlike the Climate Change Act, the Energy Transition Plan is a plan rather than a law. It does not place duties on individual companies, but it shapes where power, gas and clean energy investment goes.

How does net zero connect to sustainability reporting?

Through IFRS S2. Public interest entities must report under IFRS S1 and S2 for periods beginning on or after 1 January 2028, and IFRS S2 asks companies to disclose their climate-related targets and any transition plan they have.

IFRS S2 covers transition risks, such as new rules and changing fuel costs, alongside physical risks. Nigeria's net zero commitment and carbon budget are exactly the kind of transition risk a Nigerian company may need to discuss. See reporting deadlines for when your first disclosure is due.

The common thread is measurement. The Climate Change Act asks a company to show progress against emission targets, IFRS S2 asks it to disclose emissions and targets, and lenders may ask for both.

All three start with knowing your Scope 1 and Scope 2 emissions. Our guide to carbon accounting explains how to build those figures.

Book a demo: we show you the emissions baseline a net zero target, a Climate Change Officer's report and an IFRS S2 disclosure all depend on.

Check this yourself. These are the sources this post is based on.