Africa and Sub-Saharan African Environmental IssuesEnvironmental IssuesGlobal Warming and Climate ChangeOil and Gas

ENERGY: Limiting Greenhouse Gas Emissions In Nigeria

President Muhammadu Buhari has taken a bold step by pledging Nigeria’s readiness to align with other industrialized nations to reduce the country’s greenhouse gas emissions by 20 percent in 2030.

However, this pledge rises to 45 percent on the condition of international support.

With Buhari’s pledge, Nigeria has become the first major developing country to commit to set annual carbon budgets to plot its path to cutting emissions to net-zero.

After announcing a 2060 net-zero target at the Cop26 climate talks in Glasgow, in 2021,  Buhari signed into law a climate bill, committing his administration to produce a sweeping plan to reduce emissions, adapt to climate change and set annual and five-year carbon budgets.

A professor in environment and development at Reading University, who helped revise the climate bill, Chukwumerije Okereke, told Climate Home News: “this is the biggest thing that has happened in Nigeria with regards to climate governance.”

The bill’s sponsor, Sam Onuigbo told Climate Home he had been trying to pass a climate bill for more than ten years. Okereke said, support from environment minister, Sharon Ikeazor and momentum from the Cop26 conference helped push the text over the line.

With nearly half of its citizens lacking electricity, Nigerian pundits have been divided between those calling for the country’s unused coal reserves to be tapped for power and those advocating for the fast rollout of renewable energy sources.

While the UK’s carbon budgets are set by the independent Climate Change Committee, Nigeria’s will be set by the environment ministry and subject to approval from the cabinet. The first of these budgets is due to be announced by November 2022 and will set one-year and five-year emission reduction targets.

Only a handful of developed countries such as France, Sweden and Ireland set regular short-term targets for emission cuts. Other major emitters without such budgets include the US, Japan and Germany.

“Nigeria needs to be praised for this,” said Eugene Itua, a sustainability consultant who helped revise the bill. “We encourage other climes to follow suit.”

The bill sets up a National Council on Climate Change which will oversee Nigeria’s climate plans.

The body will be headed by President Buhari and include relevant ministers, the National Security Adviser, and the Central Bank Governor. Civil societies will also be represented, with spaces reserved for women, youth, disabled people and the private sector.

While oil provides the vast majority of Nigeria’s export revenues, the sector is also responsible for much of the country’s emissions.

The government has pledged to stop oil companies from burning gas as a by-product and instead make them capture it and sell it as an energy source.

Carbon Limits Nigeria Drives New Initiative

Concerned by challenges in realizing this lofty initiative being driven by the present administration, Carbon Limits Nigeria is beginning an engagement process and trying to contribute to improving gas processing and reducing emissions in the infrastructure of the oil and gas industry in Nigeria.

The oil and gas industry is a very important part of the economy and will continue to be for a considerable point in time.

Nigeria has become the first major developing country to commit to set annual carbon budgets to plot its path to cutting emissions to net-zero.

Carbon Limits Team members;  James Ogunleye, Managing Director; Gbite Adeniji, Director and Partner; Torleif Haugland, Co-Founder, and Partner explains how the firm is playing a strategic role in Nigeria’s long walk to the energy transition.

According to Gbiter Adeniji, the firm is not necessarily concerned about the global transition because first, it’s a reality. Global energy policy, he said, is in the transition towards a net-zero objective, and most companies and that energy sector participants have made a commitment towards the net-zero objectives.

“That is the reality, so we don’t have any issues with that. In fact, they will say that by establishing our business in Nigeria approximately 12 years ago, we anticipated the transition – helping our “climate-aware” clients address the issues around greenhouse gas (GHG) emissions. Basically, that’s our core vision,”  Adeniji said.

Climate change concern is drawing away critical investment in dollars from the energy sector. Some of the world’s biggest financiers, pension funds, and philanthropists have said they would no longer fund fossil fuel projects and this trend is expected to continue in 2022.

Although, plans are afoot for the establishment of an Energy bank to facilitate the financing of major oil and gas projects in the continent.

The proposed Energy Bank is a decision being considered after Western countries threatened to halt overseas fossil fuel financing.

The Nigerian National Petroleum Corporation(NNPC) Limited, and the African Export-Import Bank (Afreximbank) are exploring the idea of establishing a so-called ‘African Energy Bank.’

The move has been cheered by industry lobby group, the African Energy Chamber, which says the value of such a bank “cannot be overstated”.

Torleif Haugland, co-founder, and partner of the firm, said: “I think we have to be clear that there will be challenges. Generally, there is a development where some financial institutions are staying away from fossil fuel projects and investments, thus, making them more expensive. What is more important is whether the oil and gas industry can demonstrate that they are making progress in emission reductions.”

The managing director, Carbon Limits Nigeria, James Ogunleye, said, everyone has to realize that there is a global expectation.

He said, from the conference of Parties of the United Nations, which was held in Glasgow last year (COP26), it was obviously clear about global commitment towards clean energies, particularly renewable energy.

With the decade of gas, Nigeria is now switching to gas as the predominant fuel, which is a good step in the right direction, however, the global expectation is that all nations should reduce emissions, and the firm is keeping to its Nationally Determined Contribution (NDC) commitments by setting up an implementation plan on how the GHG mitigation actions will be implemented.

“As a matter of fact, that’s where the role of Carbon Limits comes in because what we do in broad terms is to help nations, national oil companies, and industries see how this can be achieved, Ogunleye stated.

“This dates back to where we started from: the Clean Development Mechanism (CDM) under the Kyoto Protocol. CDM is mainly focused on mitigation actions in developing countries but with the NDC, each country regardless of its economic status now has an obligation for emission reduction.

“The global expectation is that we cut emissions and all countries have declared GHG emissions that they are planned to cut down. As a company, this is one of the areas where we are trying to be of help – strategic implementation of mitigation actions,” he added.

LEADERSHIP reports that the company was set up in 2010 but prior to that, two projects were registered by Carbon Limits AS, Oslo. One of the two projects registered is the biggest project that was registered at that time in Africa.

The project was set up to reduce about 2.2 million tonnes of emissions on an annual basis by eliminating about 60-70 mmscfpd of gas that was being flared.

Such a project has also exposed the magnitude of emissions that can be reduced within the oil and gas industry by eliminating gas flaring and reducing methane emissions.

Adeniji said the elimination date set by Government is achievable if the regulatory framework, particularly, on the power sector side, is addressed, then Nigeria is likely to have more investment than we have currently in renewable energy projects.

Critical Challenges On Gas Emissions

What poses a serious challenge to achieving this objective is trying to get people to understand the language of climate change. Trying to get as many as possible to have that understanding of how climate change issues work internationally is seen as a bigger setback.

Experts say, there is an urgent need to get into a place where, first of all, the awareness is broadened and the capacity of people within the regulatory space is also deepened.

“It is important we attract and get some available funding opportunities for renewable energy projects and other projects that reduce GHG emissions in the country.

“The World Bank is able to support private sector projects that reduce emissions through the Transformative Carbon Asset Facility (TCAF), a trust fund that supports countries’ efforts to implement market-based carbon pricing and to create conditions for private sector investments in low-carbon technologies.

“This is the same for some other countries, particularly in Europe, that provides carbon financing opportunities for projects that are renewable energy based, particularly solar projects that reduce GHG emissions by displacing the use of diesel. “ opined Ogunleye.

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