Terminal CarbonTerminal Carbon
Pillar 3 of 4

Leakage

A project that protects one forest while pushing logging next door has not actually reduced emissions. Leakage analysis measures how much impact 'leaks' outside the project boundary.

Methodology hubBrowse scored projects
What it is

Leakage is the increase in emissions outside the project boundary that occurs because of project activities. Two kinds matter most:

  • Activity-shifting leakage — the activity (logging, grazing) simply moves to a nearby unprotected area.
  • Market leakage — reduced supply (e.g. of timber) drives prices up, incentivising production elsewhere.
Why it matters

Unaccounted leakage is one of the main reasons academic studies have found REDD+ credits to over-state real impact by 60–90%. It is a quality issue that is invisible from a registry record alone.

Robust leakage adjustment turns nominal credits into net climate benefit and is required for any credit a serious buyer will retire against an SBTi or CSRD claim.

How we assess it

Leakage belt analysis

We require monitoring of a defined leakage belt around the project (typically 5–20km for REDD+) with the same MRV cadence as the project area.

Market leakage discount

For commodity-driven projects we apply a market-leakage deduction calibrated to the elasticity of the displaced activity (timber, beef, palm oil).

Counterfactual rigour

We down-score projects whose baseline ignores regional deforestation drivers documented in peer-reviewed studies.

Cookstove fuel-stacking

For cookstove projects we adjust for partial adoption and continued use of traditional stoves alongside improved units.

Standards we recognise
  • VCS VM0048 — Reducing Emissions from Deforestation and Forest Degradation
    Latest consolidated REDD+ methodology with jurisdictional baselines and explicit leakage zones.
  • Gold Standard TPDDTEC
    Cookstove methodology with conservative usage and fuel-stacking discounts.
  • ART TREES Standard v2
    Jurisdictional REDD+ approach designed to address leakage at scale.
  • ICVCM CCP — Robust quantification
    Requires explicit, conservative treatment of leakage as a CCP integrity criterion.
Red flags we look for
  • No leakage belt defined or monitored.
  • Leakage discount of 0% for commodity-driven activities.
  • Project boundary drawn to exclude obvious displaced activity.
  • No reference to regional deforestation drivers in PD documents.
  • Cookstove projects assuming 100% replacement of traditional stoves.
Further reading
PermanenceMRV