Nigeria has announced that companies applying for oil licences and permits must now demonstrate evidence of low carbon emissions and a renewable energy program. The new policy, set to take effect from January 1, 2025, marks a significant step in the country’s commitment to achieving net-zero carbon emissions by 2060.
Gbenga Komolafe, Chief Executive of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), unveiled the policy on Tuesday, stating that it is part of Nigeria’s broader strategy to combat climate change while ensuring sustainable economic development.
“By this, the commission is deepening its efforts to align the upstream petroleum industry with national priorities and international climate goals,” Komolafe said. “We aim to ensure sustainable value creation from oil and gas resources for Nigeria’s energy security and economic development.”
To guide applicants, the NUPRC has introduced the Upstream Petroleum Decarbonisation Template (UPDT), which outlines the requirements for compliance. These include implementing methane management programs, optimizing operations with energy-efficient technologies, and integrating renewable energy sources into projects.
Nigeria is Africa’s largest oil producer and relies heavily on its petroleum sector for revenue. However, the industry has long been criticized for its environmental impact, particularly gas flaring, which releases significant amounts of carbon dioxide and methane into the atmosphere.
The new policy signals a shift toward greener practices in the sector. It also positions Nigeria as a leader in the global energy transition, especially among oil-dependent economies.
“This is a game-changer,” said energy analyst Chidi Nwafor. “It shows that Nigeria is serious about balancing economic growth with environmental sustainability. It’s a tough but necessary step.”
The Bigger picture: Nigeria’s climate goals
Nigeria’s commitment to net-zero emissions by 2060 is part of its obligations under the Paris Agreement. The country has also pledged to end gas flaring by 2030, a goal that has been repeatedly delayed due to technical and financial challenges.
The new licensing requirements are expected to accelerate progress toward these targets. By compelling operators to adopt cleaner technologies and renewable energy, the policy could significantly reduce the sector’s carbon footprint.
While the policy has been praised by environmental groups, it has raised concerns among some industry players. Smaller oil companies, in particular, may struggle to meet the new requirements due to the high costs of transitioning to low-carbon technologies.
“This is a positive development, but it could be a double-edged sword,” said an executive at a mid-sized oil firm, who spoke on condition of anonymity. “We support the move toward sustainability, but the government needs to provide incentives and support to help companies comply.”
Nigeria’s policy comes at a time when the global energy sector is under increasing pressure to reduce emissions. Many countries and companies are setting ambitious climate targets, and investors are increasingly prioritizing environmental, social, and governance (ESG) criteria.
“Nigeria is sending a strong message to the international community,” said climate activist Amina Mohammed. “This policy shows that even oil-producing nations can take meaningful action on climate change.”
Enforcement of the new requirements will begin on January 1, 2025, and will cover all approvals in the upstream sector, including divestments. The NUPRC has assured stakeholders that it will work closely with companies to ensure a smooth transition.
“This is just the beginning,” Komolafe said. “We are committed to creating a sustainable and resilient oil and gas sector that benefits both the economy and the environment.”
As Nigeria takes this bold step, the world will be watching. The success of this policy could serve as a model for other oil-dependent nations grappling with the challenges of the energy transition.
