Understanding Article 6.2 ITMO Transactions in Nigeria
Article 6.2 of the Paris Agreement enables bilateral cooperation between nations, allowing Nigeria to transfer carbon credits (known as Internationally Transferred Mitigation Outcomes or ITMOs) to purchasing governments or international compliance buyers.
To prevent double-counting under Paris Agreement rules, Nigeria applies a sovereign 'Corresponding Adjustment' (CA). This subtracts the transferred emission reduction from Nigeria’s national inventory and adds it to the buyer country’s NDC target.
- ITMO transfers require formal Host Country Authorization from the National Council on Climate Change (NCCC).
- A sovereign royalty tax (statutory 10%–12%) is levied on ITMO sales to fund national adaptation projects.
- CMAN provides pre-screening of project PDDs (Project Design Documents) to ensure 100% compliance with NCCC CA criteria.
💡Executive Takeaway / Policy Compliance
Authorized ITMO credits command a premium price ($24.00–$35.00/t) in compliance markets due to sovereign authorization and guaranteed Corresponding Adjustments.