Thai AC Makers Eye Europe Amid Heatwave and Green Policies

The Trade Policy and Strategy Office (TPSO) is urging Thai air conditioner manufacturers to penetrate European markets as a record heatwave drives demand. The office noted that Thai manufacturers should prioritize energy-efficient products that comply with Europe's stringent environmental regulations. In May, Thailand exported US$149 million worth of air conditioners, up 40.7% year-on-year, marking the strongest growth since October 2025. From January to May, the export value totaled $784 million, a gain of 18.9% year-on-year. The strongest-performing export categories in May were reversible air conditioners with heat pump functions, which surged by 70.6%, followed by air conditioner parts, rising 49.6%, and window or wall-mounted air conditioners, up 21.6%. Germany was the largest export destination with shipments worth $30.8 million, surging 89.6% year-on-year, followed by France, up 50.9%, with the UK rising 58.2% and Spain gaining 42.2%. Northern European markets recorded strong growth since the beginning of this year, with Finland growing 367% year-on-year and Sweden up 177%. Nantapong Chiralerspong, director-general of the TPSO, attributed the sharp export rise to an unusually intense and early heatwave in Western Europe in May. A persistent heat dome pushed average daily temperatures in many areas more than 10°C above normal. The combination of exceptionally hot weather and forecasts for a scorching summer prompted European importers and retailers to place orders earlier to prepare for peak summer demand from June to August. Mr Nantapong said the export growth reflects a structural shift in demand as air conditioning penetration in Europe averages about 20% of households, compared with the global average of 37% in 2022. The TPSO predicts demand for air conditioners in Europe to remain strong throughout the third quarter. The World Meteorological Organization projects above-normal temperatures across Europe from July through September, particularly in southern and central Europe, as a strengthening El Niño pattern continues to influence global weather. The sustained demand has depleted retailers' inventories and is expected to lead to continued restocking. Mr Nantapong said Europe offers strong long-term growth potential for Thai air conditioner exports. As the world's fastest-warming continent, with temperatures rising 0.53°C per decade since the mid-1990s, demand is likely to increase. EU policies promoting heat pumps are also making air conditioners an essential household appliance, supporting sustained market growth. The TPSO noted growth in the European market is closely linked to stringent environmental policies. Manufacturers should monitor tightening environmental regulations, particularly as Europe gradually limits the use of refrigerants, said the office. "To be competitive, exporters should focus on product quality, energy efficiency and environmental performance," Mr Nantapong said.