Global air conditioning demand could triple by 2050
The growth of air conditioning poses an increasing challenge for power systems amid rising temperatures and urban expansion.
Rising global temperatures, rapid urbanization, and economic growth in emerging countries are driving global demand for air conditioning. This trend could transform electricity consumption and the industry’s business models over the coming decades.
According to analyses cited by Daikin in its Sustainability Report 2026 and studies by the International Energy Agency (IEA), global demand for air conditioning could double by 2030 and triple by 2050 under a 4°C warming scenario.
This expansion could increase electricity demand for cooling by up to 40% by 2030, posing a challenge for power grids.
However, the IEA notes that there is significant scope to mitigate this growth in consumption: high-efficiency air conditioning units available on the market are more than twice as efficient as the average units sold worldwide. This makes high-performance technologies an option for reducing the energy consumption associated with air conditioning.
Latin America accelerates the adoption of energy-efficient technologies.
In Latin America, high temperatures and rising electricity costs are driving the transition to equipment with lower energy consumption. In Brazil, one of the region’s benchmark markets, residential penetration of Inverter technology rose from 68% in 2024 to 87.4% in 2025 and is projected to reach 97% in 2026.
Inverter technology automatically adjusts compressor power according to the needs of each room, rather than constantly switching it on and off, a pattern of operation that can generate peaks in electricity consumption.
The transition is also reflected in updates to regional energy efficiency standards. The company has worked with authorities and organizations across Latin America to review indicators such as SEER, which measures a unit’s cooling capacity for each unit of electricity consumed, with the aim of encouraging the replacement of outdated technologies.
Local production is also part of the sector’s activity in the region. Daikin has production and innovation facilities in Mexico and Brazil, where it manufactures residential equipment and water-cooling systems for buildings and industrial facilities, including chillers.
Manufacturers expand their business models.
Another area of focus is data centers, where the expansion of artificial intelligence and the use of high-density servers generate substantial heat loads. These facilities require specialized liquid cooling and precision cooling systems to prevent failures in digital infrastructure.
Overall, market developments are expanding manufacturers’ scope of activity to include services covering equipment operation and maintenance, in addition to equipment supply.
The operation of air conditioning equipment in use accounts for nearly 70% of greenhouse gas emissions across the industry’s value chain, according to Daikin’s corporate report.
In response to this impact, the company has set a target of reducing its emissions per unit of sales by 40% by 2030, compared with 2022 levels.
In its latest reported results, Daikin reported a 34% reduction in its net emissions and a 47% reduction in emissions from its manufacturing processes.
“The growth of air conditioning does not only mean installing more equipment. It also requires improving its efficiency and the way it is operated over many years. In Latin America, where markets with different levels of access to air conditioning coexist with very different energy needs, this transformation opens up an important discussion about how to meet demand without unnecessarily increasing electricity consumption,” said Satoshi Okayama, General Manager of Daikin Latin America.
Demand projections and energy efficiency requirements highlight the challenge of meeting cooling needs without unnecessarily increasing electricity consumption. The analyses and results cited are part of Daikin’s Integrated Report 2026 and Sustainability Report 2026.
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