China Refrigerator Information Label: Specification Development and Potential Impact

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In the last five years, China's refrigerator market has grown rapidly, and now urban markets are showing signs of saturation, with ownership rates in urban households reaching 92%. Rural markets continue to grow from a much lower base. As a result of this growth, the Chinese government in 2006 decided to revise the refrigerator standards and its associated efficiency grades for the mandatory energy information label. In the Chinese standards process, the efficiency grades for the information label are tied to the minimum standards. Work on the minimum standards revision began in 2006 and continued through the first half of 2007, when the draft standard was completed under the direction of the China National Institute of Standardization (CNIS).

Development of the information label grades required consideration of stakeholder input, continuity with the previous grade classification, ease of implementation, and potential impacts on the market. In this process, CLASP, with the support of METI/IEEJ, collaborated with CNIS to develop the efficiency grades, providing technical input to the process, comment and advice on particular technical issues, and evaluation of the results. After three months of effort and three drafts of the final grade specifications, this work was completed. In addition, in order to effectively evaluate the impact of the label on China's market, CLASP further provided assistance to CNIS to collect data on both the efficiency distribution and product volume distribution of refrigerators on the market.

The new information label thresholds to be implemented in 2008 maintain the approach first adopted in 2005 of establishing efficiency levels relative to the minimum standard, but increased the related required efficiency levels by 20% over those established in 2003 and implemented in 2005. The focus of improvement was on the standard refrigerator/ freezer (class 5), which constitutes the bulk of the Chinese market. Indeed, the new requirements to achieve grade 1 on the label are now virtually as stringent as those for US Energy Star-qualified or EU A-grade refrigerators.

When the energy information label went into effect in March 2005, refrigerator manufacturers were required to display their declared level of efficiency on the label and report it to the China Energy Label Center (CELC), a newly established unit of CNIS responsible for label program management. Because of the visible nature of the label, it was found, through a METI/IEEJ-supported study, that MEPS non-compliance dropped from 4% to zero after the label became mandatory, and that the percentage of higher-grade refrigerators increased. This suggests that the label itself does have potential for shifting the market to higher-efficiency models (Lin 2007). One challenge, however, of assessing this potential impact is the lack of a comprehensive baseline of market efficiency and a program to evaluate the market impact on a yearly basis.. As a result, the impact evaluation in this study draws upon the market transformation experience of the related EU energy information label, for which quantitative assessments of its market impact exist. By assuming a parallel process unfolding in China, it is possible to look at the potential impact of the label to 2020.

The results of the analysis demonstrates that a robust market transformation program in China focused on the energy information label could save substantial amounts of electricity by 2020, totaling 16.4 TWh annually by that year, compared to a case in which the efficiency distribution of refrigerators was frozen at the 2007 level. Remarkably, the impact of a successful market transformation program with the label would essentially flatten the consumption of electricity for refrigerator use throughout most of the next decade, despite the expectations of continued growth in total stock by nearly 190 million units. At the end of this period, total consumption begins to rise again, as the least efficient of the units have been mostly removed from the market.

Such a level of savings would reduce CO2, SO2, NOx and particulate matter as well. Cumulatively to 2020, CO2 emissions would decline by 67.5 million tonnes; SO2 by 368,000 tonnes, NOx by 263,000 tonnes, and particulate matter by 1.6 million tonnes. To ensure that the information label can provide the basis for such a market transformation, additional focus should be paid to regular monitoring and supervision of the label, expansion of market survey and information collection efforts, building recognition and awareness of the benefits of buying higher-ranked models, and development of programs of consumer education and promotion in conjunction with retailers.

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