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This policy brief by the Climate Policy Initiative analyzes the air conditioning (AC) sector in Brazil, focusing on the impact of the Zona Franca de Manaus (ZFM) industrial policy. It argues that current tax incentives and the Basic Productive Process (PPB) requirements hinder energy and productive efficiency, leading to products with outdated technology and a deterioration in production indicators between 2003 and 2015.

This report analyzes the impact of the Zona Franca de Manaus (ZFM) industrial policy on the energy and productive efficiency of the air conditioning (AC) sector in Brazil. It finds that despite significant tax incentives, the sector has experienced a deterioration in efficiency between 2003 and 2015, partly due to restrictive Basic Productive Process (PPB) rules that favor outdated domestic compressor technology over more efficient international alternatives.

This report by the Climate Policy Initiative (CPI) analyzes whether the tax incentives provided to the Zona Franca de Manaus (ZFM) have improved the productive and energy efficiency of its industries compared to the rest of Brazil between 2003 and 2015. The study concludes that despite significant tax expenditures, there is no evidence that these incentives have increased efficiency, even in the region's most prominent industrial sectors.