6.6 Leakage

corresponds to 2.5.9 NCS

Leakage are negative external effects. That is to say, a reduction in usage in a forest in one place should not be offset by increased usage in another location. The internal leakage affects the forest owner personally. The external leakage, generally known as market leakage, can also occur geographically further afield.

Internal Leakage: Leakage in the strict sense is avoided when a forest owner must consider their entire forest within the project when it involves managed forest. The exclusion of areas must be justified and conservative regarding the C-balance. For example: areas not inventoried for timber measurements on marginal sites, areas pending sale, extensive damage areas as per Chap. 5.1.3.

External Leakage: It cannot be excluded that more wood may be cut in another location due to the sink project. The timber market is, however, extensively interconnected both globally and nationally. The project results in the non-exhaustion of the sustainable use potential at the project level. As long as national usage remains below what is sustainably possible, no leakage can be attributed to the individual project. Only when this usage potential is exceeded does a possible causal link emerge.

It must be demonstrated that the national usage quantity of the country where the project is located is lower in the crediting year than the usage potential (disaster years excluded). In this case, leakage is assumed to be zero. Otherwise, a 10% leakage must be deducted. If the usage amount for the credit year is not yet known, the following applies: If the difference between the country's national usage amount and the utilisation potential does not fall below 10% in the previous year, this value can be used as a proxy.

The non-consideration of soil carbon leads to an underestimation of sink performance. This underestimation provides an additional buffer for potential external leakage effects.