CBAM Impact on Nigeria: Steel, Aluminium, and Fertilisers in Africa's Largest Economy

Nigeria is Africa's largest economy and a significant exporter of steel, aluminium, and fertilisers to the EU. This guide explains Nigeria's CBAM exposure, the absence of carbon pricing, and the compliance pathway for Nigerian exporters shipping CBAM-covered goods.

Published April 2026·Last updated April 2026·carbonborderadjustment.co.za

Nigeria and CBAM: Africa's Largest Economy Faces Its Carbon Reckoning

Nigeria is Africa's most populous nation and its largest economy by GDP. It is also a significant exporter of CBAM-covered goods to the European Union — primarily steel products, aluminium, and nitrogen-based fertilisers. With no qualifying carbon pricing mechanism in place, Nigerian exporters face the full CBAM cost from 31 May 2027.

Nigeria's CBAM-Exposed Industries

Steel: Nigeria's steel sector is anchored by the Ajaokuta Steel Complex (Kogi State) and Delta Steel Company (Delta State). Both facilities export to EU markets. Nigeria also has a growing electric arc furnace (EAF) sector in Lagos and Port Harcourt producing long steel products. Aluminium: Nigeria's aluminium sector is primarily downstream (rolling, extrusion) rather than primary smelting. However, aluminium semi-fabricated products (CN codes 7604–7606) are within CBAM scope and are exported to EU buyers. Fertilisers: The Indorama Eleme Fertiliser and Chemical Company in Rivers State is one of Africa's largest urea producers, with a capacity of 1.4 million tonnes per year. A significant portion of its output is exported to EU agricultural markets under CN codes 3102 (ammonium nitrate) and 3105 (mixed fertilisers).

The Carbon Pricing Gap

Nigeria's Finance Act 2021 introduced a carbon tax framework in principle, but implementation has been delayed. As of 2026, no qualifying carbon price has been applied to industrial emissions at a level that would trigger the CBAM Article 9 deduction. This means Nigerian exporters pay the full CBAM cost — estimated at EUR 130/tonne for steel and EUR 441/tonne for aluminium using EU default emission factors.

Grid Carbon Intensity: A Partial Advantage

Nigeria's national grid runs at approximately 430 gCO₂/kWh — significantly lower than South Africa's coal-heavy 750 gCO₂/kWh. This is because Nigeria's power generation is dominated by gas turbines (approximately 80%) rather than coal. For energy-intensive industries, this translates into lower Scope 2 embedded emissions and a lower actual CBAM cost compared to the EU default values. Nigerian exporters who invest in actual emissions measurement and third-party verification are likely to achieve CBAM costs well below the EU default — a significant competitive advantage.

Compliance Pathway for Nigerian Exporters

▸Identify all CBAM-scope goods in your EU export portfolio using CN code classification
▸Calculate actual embedded emissions per tonne using the EU CBAM methodology
▸Appoint an Authorised CBAM Declarant registered in the EU CBAM Registry
▸Register at the Digital Product Passport Registry to produce a verified carbon report
▸Submit your first CBAM declaration by 31 May 2027

The Strategic Opportunity

Nigeria's gas-based electricity grid gives its industries a structural carbon advantage over coal-dependent competitors. Exporters who document and verify their actual emissions will pay significantly less than the EU default CBAM cost — and will be able to market their lower-carbon products at a premium to EU buyers increasingly focused on Scope 3 emissions reduction.

Frequently Asked Questions

Which Nigerian exports are subject to CBAM?

Nigeria's primary CBAM-covered exports include steel products (CN codes 7206–7217, 7304–7306), aluminium (CN codes 7601–7606), and nitrogen-based fertilisers (CN codes 3102–3105). Nigeria's Ajaokuta Steel Complex and Delta Steel Company produce steel for export, while the Indorama Eleme Fertiliser plant exports urea and ammonia to EU markets.

Does Nigeria have a carbon tax or ETS?

As of 2026, Nigeria does not have a national carbon tax or emissions trading system. The Finance Act 2021 introduced a carbon tax framework in principle, but it has not been implemented at a rate that qualifies for CBAM deduction under Article 9 of the CBAM Regulation. Nigerian exporters therefore face the full CBAM cost with no domestic carbon price credit.

What is Nigeria's grid carbon intensity?

Nigeria's national grid has a carbon intensity of approximately 430 gCO₂/kWh, driven by a mix of gas-fired power plants (about 80%) and hydropower (about 20%). This is lower than South Africa's coal-heavy grid but still significant for energy-intensive industries like aluminium smelting.

What is Nigeria's estimated CBAM liability?

For steel exports, Nigeria's estimated CBAM cost is approximately EUR 130/tonne using EU default emission factors (1.985 tCO₂/t × EUR 65.42/tCO₂). For aluminium, the estimated cost is approximately EUR 441/tonne (6.745 tCO₂/t × EUR 65.42/tCO₂). These are gross costs before any actual emissions verification.

What should Nigerian exporters do to prepare for CBAM?

Nigerian exporters should: (1) identify all CBAM-scope goods in their EU export portfolio; (2) calculate actual embedded emissions per tonne; (3) appoint an Authorised CBAM Declarant in the EU; (4) register at the Digital Product Passport Registry; and (5) submit their first CBAM declaration by 31 May 2027.

Gate 3 — Complete Registration

✓ Gate 1 KYC · ✓ Gate 2 CBAM · Gate 3 DPP →

Digital Product Passport Registry

Complete all three compliance gates — Gate 1 KYC identity verification, Gate 2 CBAM financial authorisation, and Gate 3 Digital Product Passport registration — in one place at the DPP Registry.

Start Three Gates Registration →