South-East market dominated by low efficiency ACs

According to a recent report, 74% of room air conditioners (RAC) sold in six South-East Asian countries do not meet minimum threshold according to China’s MEPS. The authors modelled the CO2 emissions gains of scenarios aimed at improving RAC energy efficiency. 

The Collaborative Labelling and Appliance Standards Programme (CLASP) recently published a report examining the room air conditioner (RAC) market in 2021 in six countries accounting for 90% of South-East Asia’s RAC market: Indonesia, Malaysia, the Philippines, Thailand, Vietnam and Singapore.

In 2021, the RAC market size across the six countries was estimated at 8.3 million units of mostly split systems. Malaysia and Singapore had the highest RAC penetration rate, with over 80% of households owning one. In other countries, RAC ownership was Thailand (55%), Vietnam (32%), Philippines (25%) and Indonesia (15%). 


Several countries have adopted increasingly stringent Minimum Energy Performance Standard (MEPS), such as Brazil, China, India and Japan. Unfortunately, policies in South-East Asian countries are not at the same level. As a result, both locally produced and imported ACs, are of low efficiency. In this report, “low efficiency RACs” were defined as air conditioners that are not aligned with China’s MEPS. The threshold is CSPF (Cooling Seasonal Performance Factor) 6.1 Wh/Wh for CC (Cooling Capacity) ≤ 4.5 kW, CSPF 5.1 Wh/Wh for 4.5 kW < CC ≤ 7.1 kW, and CSPF 4.5 Wh/Wh for 7.1 kW < CC ≤ 14.0 kW.  


74% of air conditioners sold in the region in 2021 were low efficiency units. Most of these low-efficiency units (71%) were produced in South-East Asia region, primarily by subsidiaries of multinational companies operating in the region. All six countries also imported RACs to meet the growing demand, namely from China (82% of total low low-efficiency imports). Unfortunately, most ACs imported to South-East Asia do not meet the exporting country’s MEPS. For instance, 93% of RACs imported to Southeast Asia from China do not meet China’s MEPS.  


MEPS are critical to improve energy efficiency of appliances worldwide. However, tackling inefficient air conditioners dumping requires a suite of policies, including collaborative efforts between exporting and importing countries. CLASP modelled the potential impact of three policy scenarios benchmarked against no policy intervention (Business As Usual). 

  • Policy Scenario 1. If all six countries adopted China MEPS by 2025, the region would achieve emissions reductions of 639 MtCO2e cumulatively 2025-2050 or a 20% reduction as compared with Business As Usual (BAU).
  • Policy Scenario 2. If all six countries adopted China’s MEPS and U4E refrigerant guidelines (GWP ≤ 750 and ODP = 0), the region would achieve emissions reductions of 675 MtCO2e cumulatively 2025-2050. 
  • Policy Scenario 3. If all six countries adopted China’s MEPS, U4E refrigerant guidelines, and an accelerated low-GWP transition starting in 2025, the region would achieve emissions reductions of 1,039 MtCO2e cumulatively 2025-2050, nearly one third of emissions reduction as compared with BAU. 


For a more detailed assessment of the room air conditioning market in the South-East Asia as well as China’s exports, download the report from the CLASP website.