Nigeria’s Path to Net-Zero: Navigating Methane Emissions and Gas Ambitions

Transcript

What is the connection between Nigeria’s decade of gas ambition and the potential increase in methane emissions?

The decade of gas initiative represents Nigeria’s ambition to maximize its gas resources and reserves, estimated at 200 trillion cubic feet. This initiative aims to bridge energy access gaps, increase government revenues, and drive industrialization to achieve economic growth.

The decade of gas spans from 2021 to 2030. As part of this effort, the government launched the Decade of Gas Initiative, with further details released in May 2024. This initiative seeks to transition Nigeria’s energy use to gas. For instance, it includes switching to compressed natural gas (CNG) for transportation, moving from kerosene and charcoal to liquefied petroleum gas (LPG) for domestic cooking, and increasing the use of gas in power generation. These ambitions align with Nigeria’s sustainable development goals for energy access by 2030.

Additionally, there are plans to increase gas exports to generate revenue. However, this comes with challenges. Expanding gas infrastructure—pipelines, storage tanks, and other facilities—introduces the risk of methane emissions through leaks, operational processes, or intentional releases. Therefore, the government must adopt and invest in methane abatement technologies to mitigate the potential rise in emissions.

How does methane emission impact the environment and health of oil-producing communities?

Methane emissions are categorized into three main components: Venting, the intentional release of gas that could otherwise be captured and commercialized; fugitive emissions, accidental leaks from pipelines, valves, wells, or equipment and gas flaring, the combustion of gas as part of oil production.

The International Energy Agency (IEA) estimated that in 2023, venting accounted for 67 percent of Nigeria’s methane emissions. Fugitive emissions contributed 19 percent, and gas flaring comprised about 11 percent.

Although gas flaring contributes the least proportionally, it is significant. Nigeria is among the top 10 gas-flaring countries globally, contributing to 75 percent of global flaring, according to the World Bank’s 2023 data.

The health implications for oil-producing communities are severe, including respiratory and cardiovascular diseases, environmental degradation, and damage to livelihoods through flooding and sea encroachment. These challenges highlight the need for the government to implement strong methane emissions reduction strategies to mitigate the harm to affected communities.

What economic opportunities could Nigeria leverage by addressing gas flaring and methane abatement?

Nigeria’s gas export ambitions rely heavily on international markets, particularly the European Union (EU). The EU accounts for 43 percent of Nigeria’s crude oil exports and 60 percent of its liquefied natural gas (LNG) exports.

Starting in January 2027, the EU will enforce strict methane monitoring reporting and verification (MRV) standards. Countries that fail to meet these standards risk penalties, fines, or exclusion from the EU market. Other markets may adopt similar regulations, meaning Nigeria could lose critical export revenue if it does not comply.

A report from Stakeholder Democracy Network reveals that Nigeria could have generated $280 million in revenue from gas flaring in 2020 and fines for flaring could have amounted to approximately $1.2 billion. However, it remains unclear to what extent the government has collected these fines. Given the country’s ongoing debt and fiscal challenges, fully recovering these revenues would provide significant economic relief. Furthermore, IEA estimates that Nigeria could have earned $250 million in 2023 through methane abatement by selling recovered gas. The country has a gas commercialization program; scaling it up could be crucial in addressing these issues.

How do Nigeria’s gas initiatives align with its net-zero goal, and what steps are needed to meet flaring and emissions reduction targets?

Nigeria has committed to achieving net-zero emissions by 2060, incorporating gas as a transition fuel in its Energy Transition Plan. The “Decade of Gas” aligns with Nigeria’s strategy to leverage gas as a critical transition fuel. A vital component of this strategy is the Nigerian Gas Flare Commercialization Program (NGFCP), initially launched in 2016. However, due to various delays, it only reached full implementation this year.

Scaling up the NGFCP is crucial for capturing flared gas, much of which companies intentionally vent due to the lack of commercial utilization opportunities. Nigeria can redirect this gas for productive use in power generation or other applications such as liquefied petroleum gas (LPG) and compressed natural gas (CNG).

A deliberate and accelerated implementation of the NGFCP, alongside Nigeria’s broader gas initiatives, is essential to minimizing flaring. This progress would directly contribute to reducing emissions and support Nigeria in meeting its national and global commitments to reducing methane emissions. Two critical targets in this context are eliminating gas flaring by 2030 and reducing fugitive emissions by 60 percent by 2031. With these deadlines fast approaching, the government must intensify efforts to ramp up the NGFCP and related initiatives.

What are the challenges in monitoring, reporting, and verifying flares, and how can this be addressed?

The Nigerian government has taken significant steps to track and verify methane emissions. For instance, the National Oil Spill Detection and Response Agency (NOSDRA) has developed a gas flare tracker and, in partnership with the Stakeholder Democracy Network (SDN), a methane tracker. The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has also introduced guidelines and regulations outlining steps companies can take to report their emissions.

However, the current self-reporting framework presents inherent challenges. While the upstream regulator has confirmed that they perform source-based verification at wellheads and installations to confirm methane emissions released into the atmosphere, they need to do more. It’s critical to foster greater cohesion and collaboration among the agencies responsible for limiting methane emissions.

For example, despite the existence of the methane tracker, it remains unclear whether the upstream regulator is actively utilizing it. This highlights the need for better alignment and coordination across agencies, including the National Council on Climate Change, which oversees Nigeria’s climate action efforts. Establishing agreed modalities for tracking, monitoring, reporting, and verifying emissions is essential.

Such alignment would not only enable national and international stakeholders, as well as civil society, to track Nigeria’s progress toward its climate commitments but also bolster the country’s credibility in global climate dialogues.

Who are the concerned stakeholders that can ensure Nigeria reduces methane emissions, and what should they focus on to strengthen emission reduction?

Reducing methane emissions requires the active involvement of key stakeholders, including the government, companies, civil society, the general public, and international partners.

The federal government, through the National Council on Climate Change, the Federal Ministry of Petroleum Resources, the Federal Ministry of Environment, and the Department of Climate Change, is central to developing and implementing a robust methane emissions reduction framework across the oil and gas value chain—from upstream to midstream and downstream.

These actors must prioritize strong monitoring, regulatory, and verification systems that effectively enforce compliance with established regulations and targets. Additionally, the Federal Ministry of Petroleum Resources should set minimum emissions reduction targets for companies. This is vital to ensuring Nigeria remains competitive in global trade markets, such as the EU, which may impose stringent emissions regulations.

Oil and gas companies have a responsibility to invest in methane abatement technologies and adhere to the highest environmental and technical standards. As we continue to witness a wave of divestments from oil and gas assets, it is critical that both the government and companies ensure new asset owners possess the financial, technical, and environmental capabilities to meet these standards and contribute to reducing emissions.

International partners also have a vital role to play by channeling funding toward methane abatement projects that prioritize community-level benefits and scalable applications. They should also support technology transfer and capacity building and provide technical assistance to governments, companies, civil society, and the general public to bolster methane emissions reduction efforts.

Given the accelerating energy transition, how can Nigeria balance its gas ambition with its climate goals and the imperative of the energy transition?

As Nigeria implements its Decade of Gas plans, it must prioritize reducing methane emissions to maximize the economic benefits while the opportunity remains viable.

However, beyond 2030, Nigeria should increasingly integrate renewable energy and hybrid solutions into its energy mix. These steps will not only help address energy access challenges but also potentially increase revenues and ensure a more sustainable energy future.

Furthermore, as Nigerian authorities develop and implement gas expansion plans, they must be mindful of and responsive to the growing constraints imposed by the energy transition. These constraints include financial limitations, infrastructure deficits, and human resource challenges. Achieving a balance between meeting domestic energy demand and creating a sustainable future will require strategic planning and coordinated efforts.