China’s consumer goods trade-in: accelerating cooling efficiency in a warmer climate

The report finds that China's consumer goods trade-in programme could accelerate the annual efficiency improvement rate of its room air conditioner (RAC) stock by up to 70% in 2025. This shift could reduce residential cooling electricity use by 3.4% to 4.1% during the summer of 2025, potentially saving consumers up to $943 million USD on electricity bills. The programme, part of the "Two New" policy, provides subsidies of 15% for Grade 2 and 20% for Grade 1 energy efficiency models, effectively steering consumers toward the most efficient units. This initiative aligns China's economic goal of boosting domestic consumption with its energy transition and decarbonisation targets.

• The consumer goods trade-in programme is projected to accelerate the annual energy efficiency improvement rate of China's room air conditioner (RAC) stock to between 5.0% and 6.1% in 2025, which represents an increase of 40% to 70% over the recent historical average.
• Depending on the market share of Grade 1 models, residential cooling electricity consumption during the summer of 2025 could decrease by 3.4% to 4.1% compared to a baseline without efficiency improvements, leading to estimated consumer electricity bill savings of up to $943 million USD.
• The trade-in programme is part of the "Two New" policy, which combines large-scale equipment upgrades with consumer goods trade-ins. Funding for the programme is expected to double to 300 billion CNY ($41.7 billion USD) in 2025 to stimulate domestic demand and shift toward a demand-driven economic growth model.
• Subsidies are structured to incentivise high-efficiency appliances, offering 20% of the retail price for Grade 1 models and 15% for Grade 2. Because Grade 2 models are often perceived as less cost-effective and have limited availability, the policy effectively directs consumers toward Grade 1 models.
• China possesses the world's largest RAC market, accounting for approximately 55% of the global market by 2024. By the end of 2023, the national average was 145.9 RACs per 100 households, with urban areas reaching 171.7 units per 100 households.
• Climate change and record heat in 2024 have increased pressure on the power grid; residential electricity consumption rose by 10.6% year-on-year in 2024, with space cooling accounting for 70% of that increase between July and September.
• Previous efforts, including the 2020 update of minimum energy performance standards (MEPS), have already improved efficiency; the average energy efficiency of new RAC sales improved by 31% in 2022 compared to 2019.

APA

Yang, B., & Ewen, M. (2025). China’s consumer goods trade-in: accelerating cooling efficiency in a warmer climate. Ember. https://ember-energy.org/app/uploads/2025/07/Ember-Report-Chinas-consumer-goods-trade-in-accelerating-cooling-efficiency-in-a-warmer-climate.pdf

Chicago

Yang, Biqing, and Matt Ewen. China’s consumer goods trade-in: accelerating cooling efficiency in a warmer climate. Ember, 2025. https://ember-energy.org/app/uploads/2025/07/Ember-Report-Chinas-consumer-goods-trade-in-accelerating-cooling-efficiency-in-a-warmer-climate.pdf.

Wikipedia

{{cite report |last1=Yang |first1=Biqing |last2=Ewen |first2=Matt |title=China’s consumer goods trade-in: accelerating cooling efficiency in a warmer climate |publisher=Ember |date=15 July 2025 |url=https://ember-energy.org/app/uploads/2025/07/Ember-Report-Chinas-consumer-goods-trade-in-accelerating-cooling-efficiency-in-a-warmer-climate.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{yang2025chinas, author = {Yang, Biqing and Ewen, Matt}, title = {{China’s consumer goods trade-in: accelerating cooling efficiency in a warmer climate}}, institution = {Ember}, year = {2025}, month = jul, url = {https://ember-energy.org/app/uploads/2025/07/Ember-Report-Chinas-consumer-goods-trade-in-accelerating-cooling-efficiency-in-a-warmer-climate.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }