This concept has become central to global financial sustainability strategies, as it is designed to incentivise the reduction of carbon footprints by assigning a financial value to carbon emissions.
Nigeria as a nation has been identified as a major contributor to the release of greenhouse gases (GHG) especially through gas flaring, and it is in a critical position where stakeholders need to consider the existential challenges.
However, as global awareness of climate change and its effects intensifies, Nigeria is striving to balance economic growth with environmental responsibility and various initiatives and policies are tilting towards harnessing the country’s huge oil and gas potentials while at the same time deepening activities to address “Net Zero 2060” target before the international community while meeting the energy and revenue needs of approximately 200 million population.
This challenge, according to reports presents a unique opportunity because in the view of experts by leveraging the potential of carbon credits, Nigeria can revitalise its gas sector and move towards a sustainable future.
Carbon credits offer a viable solution to reduce greenhouse gas emissions, promote cleaner energy practices, and create economic incentives for sustainable development.
Carbon credits are a practical climate action initiative and a marketable commodity that rewards efforts to recover or prevent a fixed amount of greenhouse gas (GHG) emissions.
Essentially, they permit the emission of a specific amount of carbon dioxide (CO2) or other GHGs, typically one metric tonne.
Companies with high emissions can acquire these credits by investing in projects that demonstrably reduce emissions, allowing them to offset their environmental footprint while supporting sustainable practices.
For companies transitioning away from greenhouse gas emissions and wasteful flaring practices, carbon credits offer economic incentives. These credits grant convertible points for capturing flared gas or utilising it productively, such as for energy generation or gas-to-liquid conversion projects.
This approach enables companies and countries to significantly reduce their carbon footprint.
In Nigeria’s gas industry, carbon credits provide a compelling proposition. A significant portion of the sector’s emissions comes from gas flaring, which not only pollutes the environment but also wastes valuable resources.
By embracing carbon credits, Nigeria can align with its climate goals while creating a new revenue stream through the generation of marketable carbon credits.
These credits can be traded on recognised carbon markets, allowing companies to recoup the costs of capturing and utilising flared gas.
Additionally, the sale of these credits can attract investments into clean gas technologies, further accelerating the transition away from flaring and fostering innovation.
It has been observed that despite the potential benefits, several challenges impede the widespread adoption of carbon credits in Nigeria’s gas sector.
One major obstacle is the lack of a clear and comprehensive policy framework for carbon trading. Without well-defined regulations and incentives, potential investors remain hesitant to engage in carbon capture projects due to perceived financial risks.
There are concerns that while Nigeria has made commitments to drive the implementation of its 2060 Net Zero plan, the achievability of these plans, especially in the long run, remains a mirage.
The transition to a carbon-neutral economy offers Nigeria the opportunity to create a more robust and sustainable energy sector.
By embracing carbon credits and prioritising methane capture, the gas sector can unlock a significant source of revenue while reducing its environmental footprint. This approach not only helps Nigeria achieve its climate goals but also fosters international partnerships and attracts investments in clean technologies.
Some energy experts and top officials of critical entities in Nigeria’s economy have called for application of best sustainable practices in the exploration, production and utilisation of oil and gas products in the country in order to save the environment from emissions.
The experts made the submissions at a webinar titled: “Transitioning Away from Emissions, Not Oil and Gas,” which was organized by the Nigerian Institution of Petroleum Engineers (NiPeTE) in collaboration with the Lagos Chamber of Commerce and Industry Professional Practice Group (LCCI PPG).
Highlighting the role of oil and gas in global emissions and possible solutions, a former Executive Commissioner in charge of Development and Production, at the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Dr Nuhu Habib, noted that while oil and gas production contributes to emissions, it was not the largest source of global greenhouse gases.
Habib opined that oil and gas would remain key drivers of the global economy for at least the next 50 years.
He pointed out that oil and gas account for only about 15 per cent of industrial emissions, emphasising that the real challenge lies in addressing the broader industrial activities that contribute to greenhouse gases.
In his remarks, president and chairman of council, LCCI, Mr. Gabriel Idahosa, highlighted the significant emissions from gas flaring and other petroleum activities in Nigeria, which exacerbate climate change and affect public health.
He called for innovative approaches to decarbonise the economy while maintaining the growth and stability provided by oil and gas resources.
Idahosa noted that the oil and gas sector was vital to Nigeria’s economy, accounting for about 90 per cent of export revenues and approximately 60 per cent of government revenue.
In her contribution, the National Chairman of NiPeTE, Prisca Kanebi, emphasised the importance of balancing global greenhouse gas reduction goals with Nigeria’s development needs.
In his remarks, planning and commercial senior officer, Gas and Power Investment Services, Nigerian National Petroleum Company Limited (NNPC), Dr Mohammed Malami, called for the strategic integration of low-carbon technologies and improved operational efficiency to reduce emissions without eliminating oil and gas entirely.
NLNG Intervention And Anticipated Economic Benefits
Soon Nigeria would record significant foreign exchange savings of about $500 million annually with adoption of a research work supported by the Nigerian Liquifed Natural Gas Limited (NLNG).
In a significant announcement that could reshape Nigeria’s energy future, the Advisory Board of The Nigeria Prize for Science recognised the pioneering work “Process Intensification Technology for Greenhouse Emission Control in Power Generation and Industry for Sustainable Fuel Production (PIC-FUEL)” by Eni Oko, Olajide Otitoju, and Meihong Wang.
The trio was recognised for their pioneering work on PIC-FUEL which was announced on Monday in Lagos as the winners of the 2024 edition of the Prize.
The 2024 competition theme, “Innovations and Technologies for Reducing the Effect of Climate Change,” succinctly underscored the need for urgent solutions to environmental challenges.
According to the Chairman of the Advisory Board, Professor Barth Nnaji, the innovation could significantly reduce harmful emissions from power plants and factories while creating cleaner, greener fuels.
“The technology doesn’t just ensure cleaner air; it also offers significant economic benefits. It could reduce the cost of cutting down emissions by 30-40 per cent, translating to considerable reductions in the national budgetary requirement for implementing the Nigerian Energy Transition Plan, equivalent to $120-140 billion, and achieving the 2060 net zero target. Additionally, by producing cleaner diesel locally, the country could save up to $500 million annually in foreign exchange, strengthening the local economy and stabilising the Naira.
He disclosed that the proof of concept of the winning work has been established in the U.K. and Norway.
A panel of judges reached this year’s decision made up of three distinguished Professors in relevant areas of science: Prof. Francisca Nneka Okeke (Chairman), Prof. Saminu Abdulrahman Ibrahim, and Prof. Grace Oloukoi.
Other members of the advisory board are Chief Dr Nike Akande, a two-time minister and former President of Lagos Chamber of Commerce and Industry; and Professor Yusuf Abubakar, a professor of Animal Breeding and Quantitative Genetics and the Coordinator of Agriculture Group, R & D Standing Committee, at the Tertiary Education Trust Fund.
Explaining the significance of the groundbreaking work by the three scientists, Prof. Nnaji stated that the PIC-FUEL technology worked by capturing CO2 emissions directly from industrial sources such as power plants, cement factories, and refineries.
He said the emissions are passed through a unit called the Rotating Packed Bed (RPB), where CO2 is absorbed using a solvent and the absorbed CO2 is then converted into methanol through a reaction with hydrogen in an electrolyser machine.
The methanol can then be directly blended with diesel or sold as a product.
“Imagine if every time a factory or power plant released CO2, instead of harmful gases escaping into the atmosphere, those gases were captured, transformed, and repurposed into cleaner, more sustainable fuels. That is exactly what PIC-FUEL does. This revolutionary approach could cut emissions by 40 per cent, significantly reducing Nigeria’s carbon footprint and helping the country achieve its 2060 net-zero goals without expensive government subsidies. PIC-FUEL implementation will fully decarbonise the power and industrial sectors and deliver up to 20 per cent, decarbonisation of diesel-fueled transportation and household/SME electricity generators through the supply of cleaner diesel.
In his remarks earlier in the press conference, Mr. Andy Odeh, NLNG’s General Manager, External Relations and Sustainable Development, lauded The Nigeria Prize for Science and its sister awards, The Nigeria Prize for Literature and The Nigeria Prize for Literary Criticism, for making a significant impact on the science and literary development in the country in the last 20 years.
He thanked the advisory board for their dedication and exceptional contributions to the prize’s integrity and elevation to international standards. He also paid tribute to former board members and science committees, honouring the late Prof. Umaru Shehu, the first Chairman of the prize’s committee, who was instrumental in conceptualising the Prize and establishing its foundational values of integrity, transparency, and steadfastness.
Eni Oko is a Senior Lecturer (Associate Professor) in Chemical Engineering at Newcastle University, U.K., while Olajide Otitoju is a Research Associate at the University of Sheffield, U.K. Meihong Wang, is a Professor of Process and Energy Systems Engineering, specialising in Carbon Capture, Utilization, and Storage (CCUS) at the University of Sheffield, UK.
Professor Wang is winning the prize for the second time after his 2019 win with Dr. Mathew Aneke with their work on Carbon Capture, Carbon Utilisation, Biomass Gasification and Energy Storage for Power Generation.
Sahara Energy’s Zero Carbon Target
Meanwhile as the federal government inches towards providing enabling environment to support private sector initiative in dealing with carbon emissions, Sahara Energy said it has set a zero carbon emissions goal for itself.
From its assertion it hopes to achieve zero emissions from its oil, gas operations by 2030.
The company, alongside its sister companies in the energy value chain have also commenced arrangements to reduce carbon emissions and earn carbon credit for a sustainable future.
This agenda was disclosed at a forum with the media tagged: “Carbon Footprint And The African Narrative” held by Sahara Group and the Asharami Square in Lagos.
The group project manager, Asharami Energy, Wole Ajeigbe, who spoke on “Decarbonisation of Africa’s Upstream Operations”, said Sahara Energy is building a sustainable energy future with an ambitious but pragmatic approach to its upstream carbon net zero journey.
According to him, efforts are ongoing at its seven oil producing assets across Nigeria, to ensure that operations at the sites are considerate of global warming.
Ajeigbe said the net zero plan would be achieved gradually by reducing and minimising carbon emissions on a yearly basis.
Already, he said the company has some gas commercialisation projects which are expected to be completed by 2025-2026.
He listed the strategies to include; elimination of gas flare across its upstream operations; reduction in freshwater usage during operation; and making use of Carbon Capture Utilisation and Storage (CCUS) among others.
Emphasizing its determination, he said the company has already joined the global group of CCUS, emerging as the first African company in the forum.
Noting that the energy demand and usage in Africa will increase significantly in coming years, Ajeigbe said, to ensure oil and gas continue to be used to meet Africa’s energy demands, the sector needs to decarbonise its operations quickly.
He stressed the need for the government to create an enabling environment that would stimulate investments and grant fiscal incentives on gas projects such as tax holidays, funding recurities, risk mitigation among others.
The government and stakeholders, according to him, also need to encourage availability of capital pools; improve bankability of gas projects; give support to projects that have taken decarbonization seriously; and attract skills and develop the capabilities needed for the energy future.
Regional Director, West Africa, Ford Foundation, Dr. Chichi Aniagolu-Okoye, said although Africa is contributing a little (about 4%) to global warming, the continent has been severely affected by the phenomenon.
She said the fact that Africa holds up to 17% of the global population, yet contributes just 4% to global carbon emissions, means that the continent could do more for a sustainable environment through careful and strategic planning.
Aniagolu-Okoye said Africa must focus not only on challenges, but also on opportunities that global warming presents.
“There are numerous opportunities to place Africa firmly at the forefront of climate debate and the media should lead the campaign,” she said.
Director, Governance and Sustainability, Sahara Group, Ejiro Gray, said the most viable solutions for mitigating carbon emissions and meeting Africa’s development include: natural gas development; increase in use of renewables; protection and rehabilitation of African natural carbon sinks; innovation in low cost/low emissions clean energy solutions; carbon culture storage/ carbon capture and re-utilisation and utilisation of domestic knowledge.
She said Sahara has continued to make improvements to their operations in order to reduce their carbon footprint and by extension, the continent footprint.
Gray listed some of the strategies to include; increase use of renewables; gas commercialisation; research and development; sustainable energy and carbon sinks; Carbon Capture Usage and Storage (CCUS); tree planting initiatives; and awareness campaigns for youths, among others.
Protecting and rehabilitating Africa’s natural carbon sinks, such as forests, oceans, coastal mangroves, wetlands and grasslands can significantly aid in mitigating the effects of climate change, Gray said.
Gray said this developing intentional policies and investments on protecting the continent’s carbon sinks would enhance carbon sequestration and reduce net emissions.
She said these natural landscapes act as significant carbon reservoirs, absorbing and storing carbon dioxide (CO₂) from the atmosphere, adding that developing reforestation and afforestation programs, implementing strict conservation policies, and providing financial incentives for conservation projects are critical for combating climate change in Africa.
“Natural gas presents a viable opportunity to serve as a transition fuel as Africa continues to gradually invest in renewable energy. It is a relatively clean-burning fossil fuel, producing fewer CO₂ emissions compared to coal or petroleum. In 2021, Africa’s natural gas reserves totalled over 620 trillion cubic feet. By developing and monetizing these reserves through processing and eventual usage of CNG, LNG, LPG and other gas products, Africa can leverage its natural gas resources to support sustainable energy development,” Gray said.
