{"id":31048,"date":"2020-06-22T19:48:08","date_gmt":"2020-06-22T19:48:08","guid":{"rendered":"https:\/\/www.climatepolicyinitiative.org\/publication\/improving-efficiency-for-air-conditioners-the-role-of-the-manaus-free-trade-zone\/"},"modified":"2026-04-10T06:43:42","modified_gmt":"2026-04-10T06:43:42","slug":"improving-efficiency-for-air-conditioners-the-role-of-the-manaus-free-trade-zone","status":"publish","type":"cpi_publications","link":"https:\/\/www.climatepolicyinitiative.org\/id\/publication\/improving-efficiency-for-air-conditioners-the-role-of-the-manaus-free-trade-zone\/","title":{"rendered":"Improving Efficiency for Air Conditioners: The Role of the Manaus Free Trade Zone"},"content":{"rendered":"

Compared to international standards, air conditioners produced in Brazil not only lag in energy efficiency, but they also failed to show any significant improvement in recent years. Average efficiency in Brazil increased by only 10.2% in eight years (2010-2018), while the average efficiency of air conditioners sold in India improved 29% in six years (2011-2017), and, in Vietnam, 30.8% in five years (2013-2018). According to a 2018 estimate by the Energy Research Office (Empresa de Pesquisa Energ\u00e9tica<\/i> – EPE), substantially increasing the efficiency of Brazil\u2019s air conditioners would reduce emissions of CO2<\/sub> greenhouse gases by 6.3 metric tons by 2035, indicating an energy saving of 14.5 TWh or R$ 8 billions reals.<\/p>\n

This policy brief, carried out by researchers at Climate Policy Initiative\/Pontifical Catholic University of Rio de Janeiro (CPI\/PUC-Rio), analyzes the production line of air conditioning sector in Brazil with a focus on productive and energy efficiency. Researchers find that efficiency levels in the air conditioning (AC) sector declined between 2003 and 2015, in contrast to the Brazilian manufacturing industry, which had stable indicators over the same period.<\/p>\n

The industrial policy affecting this sector is the Manaus Free Trade Zone (Zona Franca de Manaus –<\/i> ZFM). For more than fifty years this policy has provided tax relief to firms located in a specific part of the state of Amazonas, the Manaus Industrial Park (Polo Industrial de Manaus <\/i>\u2013 PIM). To take advantage of these benefits, a business must perform a minimum set of operations during the manufacturing process of a product\u2014the Basic Production Process (Processo Produtivo B\u00e1sico<\/i> – PPB). In the AC sector, the PPB requires practically all stages of manufacturing and assembly to be performed within the ZFM, and air conditioning units must contain components made of domestic materials.<\/p>\n

Despite the large amount of tax exemptions, CPI\/PUC-Rio analysts do not find any indication that this industrial policy has helped boost energy or productive efficiency in the AC sector. Rather, the policy appears to create distortions that result in a final product with low energy efficiency, and a production line with low levels of productive and energy efficiency. The policy also hinders the dynamism of the sector and inhibits competition throughout the manufacturing process.<\/span><\/p>\n

While the current discussion on minimum energy performance standards (MEPS) in AC units is important, it will also be essential to modify current industrial policy to encompass the entire manufacturing process and to refine the mechanisms that directly influence the efficiency of the sector and its products.<\/p>\n\n\n

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