The EU prices carbon for its own industry through its Emissions Trading System. That creates a problem: if producing steel inside the EU carries a carbon cost and producing it outside does not, production moves outward and total emissions do not fall. Economists call this carbon leakage.
The Carbon Border Adjustment Mechanism closes that gap by requiring importers of certain carbon-intensive goods to account for the emissions embedded in what they bring in, and eventually to surrender certificates reflecting them.
It is not a tariff on Nigeria, and it is not framed as a trade measure. But the practical effect on a Nigerian exporter of covered goods is the same as one: your European customer now has a cost and a reporting burden attached to buying from you, and they will look for ways to reduce both.
The list at introduction. It has been extended before and the scope of the definitive regime is subject to review, so confirm against the current regulation.
This is the point most exporters miss, and it costs them months.
A sustainability disclosure reports emissions at organisational level: total Scope 1, total Scope 2, allocated across the company. CBAM asks for emissions embedded in a specific consignment of a specific good — direct emissions from the production process, and in some cases indirect emissions from the electricity used to make it, attributed per tonne of product.
That requires a different measurement architecture. You need to know energy and process emissions at the installation and production-route level, allocated across outputs, with a defensible basis for the allocation. A site total divided by total output is a starting point, but for a facility producing several grades or several products it will not survive review.
The good news is that the underlying data is the same data. If you are collecting energy and fuel per installation for your Nigerian disclosure, you are most of the way there — you need the production volumes alongside it and a documented allocation method.
Four questions — what you produce, whether you export to the EU, whether you can produce product-level emissions data, and whether a buyer has already asked. The result tells you your readiness and how urgent it is.
No. The certificate obligation sits with the EU importer. Your exposure is commercial: the cost your buyer incurs is a cost of buying from you, and if a competitor in a lower-carbon jurisdiction is cheaper to import, that shows up in your pricing conversation.
The regime provides for default values where actual data is unavailable, and default values are generally conservative — meaning they assume higher emissions than a well-run facility would actually produce. Being unable to supply real data typically makes you look worse than you are.
The mechanism contemplates adjustment for a carbon price effectively paid in the country of origin. Whether and how that applies depends on the Nigerian regime in force at the time and on the evidence you can produce. Take specific advice — this is a genuinely technical area and we are not going to guess at it.
The UK has announced its own carbon border adjustment mechanism on a separate timetable with its own scope. Treat it as a parallel requirement rather than an equivalent one, and check the current UK position directly.
A summary of a regulation is not the regulation. These are the primary documents this page is based on.
Four questions, and you get the year you first file, the framework, and what to collect first.
Plain-language explainers of the FRC and SEC rules, ISSB S1 & S2, and what each asks you to disclose.
What a consultant-led reporting cycle costs against an annual licence, in Naira.
