China Releases New Policies to Advance Efficient and Climate-Friendly Cooling
8 January 2026 – China recently released two national policy instruments to advance the transition to energy-efficient, climate-friendly residential air conditioners (ACs) in its domestic market. These instruments also aim to strengthen the domestic collection and recycling systems needed to improve lifecycle refrigerant management. IGSD provides further details on these instruments, referred to as “Circulars,” below, with links to the original Chinese versions.
- Circular on Implementing the Large-Scale Equipment Upgrade and Consumer Goods Trade-in Policies in 2026 (National Development and Reform Commission and Ministry of Finance, 8 January 2026):
This Circular incentivizes the purchase of energy-efficient ACs and supports end-of-life AC and refrigerant management through:
- Providing a subsidy to individual consumers who purchase ACs with level-1 energy efficiency performance, the highest level under China’s AC energy efficiency standards, at 15% of the product sale price, with a cap of RMB 1,500 per unit and limiting to one unit per consumer; and
- Supporting improvements to end-of-life AC and refrigerant management by strengthening the recycling system, including the collection points, transfer stations, and sorting centers, and by strengthening supervision of disassembly/recycling enterprises.
2. Circular on Green Consumption Promotion Action (Ministry of Commerce, together with the National Development and Reform Commission, Ministry of Industry and Information Technology, Ministry of Ecology and Environment, Ministry of Housing and urban-Rural Development, Ministry of Agriculture and Rural Affairs, the People’s Bank of China, the State Administration for Market Regulation, and the National Financial Regulatory Administration, 4 January 2026):
This Circular contains several AC-related provisions:
- Encouraging consumers to buy green smart appliances, including fluorine-free ACs;
- Promoting the development of a green supply chain, including prioritizing the procurement of high-efficiency equipment and conducting the carbon-footprint evaluation; and
- Supporting the establishment and improvement of collection and recycling systems, which include the collection points, transfer stations, and sorting centers.
Together, these two policy instruments are expected to incentivize the transition to energy-efficient and climate-friendly ACs in China’s domestic market and to support lifecycle refrigerant management by strengthening the collection and recycling system for end-of-life ACs. We will continue to monitor these developments, as they serve as useful examples of policies for transitioning cooling systems in a major Global South producer of cooling equipment.
Additional IGSD resources related to this topic:
- IGSD (3 November 2025) A First Look at China’s 2035 NDC: Headline Targets and Non-CO₂ Action.
- IGSD (9 April 2025) China Issues National Plan to Strengthen the Management of Ozone-Depleting Substances and Climate-Polluting Hydrofluorocarbons.
- IGSD (2 April 2025) China Issues Action Plan to Promote Development of the Heat Pump Industry.
- IGSD (24 July 2024) China Policy Developments Provide Opportunities to Tackle Lifecycle Refrigerant Management in the Cooling Equipment End-of-Life Recycling and Disposal Processes.
