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The document argues that Brazil's air conditioning (AC) sector lags in energy efficiency compared to international peers and that the current industrial policy in the Manaus Free Trade Zone (ZFM) creates distortions that hinder efficiency gains. Despite significant tax exemptions, the Basic Production Process (PPB) requirements—such as the mandatory use of domestically produced, outdated non-inverter compressors—conflict with energy efficiency goals. The brief recommends aligning industrial policy with energy performance standards and labeling policies to foster a more competitive and efficient sector.

A study by the Climate Policy Initiative and PUC-Rio finds that the Manaus Free Trade Zone (ZFM) has not resulted in efficiency gains for the region's industries. Despite significant tax expenditures—reaching R$ 27.8 billion for ZFM, Western Amazon, and Free Trade Areas in 2015—both energy and productive efficiency levels in the ZFM remained similar to the national average from 2003 to 2015. This lack of impact persists even in the most representative sectors, such as two-wheel vehicle production and audio and video, where tax benefits are most concentrated.