Across the world, there’s increasing pressure on the oil and gas industry to explain how the global shift to cleaner energy will affect their operations and long-term strategies. This is happening at a time when investment in the sector is slowing down not because it’s underperforming, but because governments, financial institutions, and even shareholders are pushing for stronger climate action and decarbonisation.
Given this shift, there’s a strong case for introducing a climate compatibility checkpoint into Nigeria’s Petroleum Industry Act (PIA), making it a key part of the licensing process for oil and gas companies. This checkpoint would act as a gatekeeper ensuring that any future licences granted for exploration, drilling, or production are only approved if the proposed activities align with Nigeria’s climate goals.
The idea borrows from the concept of climate-compatible development, which simply means creating policies that reduce the risks of climate change while also supporting economic growth and development. For example, countries like the UK have implemented similar checkpoints to determine whether new oil and gas fields can proceed without undermining national emissions targets.
For Nigeria, this means setting clear conditions: oil and gas companies must show how they plan to reduce emissions not just from their own operations, but across their entire value chains. It’s no longer enough to produce oil efficiently; companies need to prove that they’re investing in cleaner technologies, electrifying processes, reducing methane leaks, or even supporting carbon capture initiatives.
A key opportunity lies in accelerating the adoption of Compressed Natural Gas (CNG) as a cleaner, more affordable alternative to petrol and diesel particularly in transportation and small-scale industrial use. Expanding CNG infrastructure not only reduces operational costs for end users but also significantly cuts carbon emissions and improves air quality in urban areas. Incorporating CNG usage into the climate checkpoint criteria would further incentivize oil and gas companies to diversify their offerings and invest in cleaner fuels that align with Nigeria’s energy transition plan.
If Nigeria is serious about meeting its target of cutting greenhouse gas emissions by 50% by 2050 and reaching net-zero by 2060 then climate compatibility must become a non-negotiable standard for operating in the oil and gas space. CNG, as an available and scalable option, represents a practical step forward in that direction.
Olasoji Fagbola is a Sustainable Development expert, policy analyst with flair for Science Journalism.
