Phase Change Emulsion (PCME) is a multifunctional fluid consisting of a Phase Change Material (PCM) and a carrier fluid. PCMEs can store or transfer amounts of thermal energy by using the latent heat capacity of the PCM. In this paper, a combination of paraffin (RT10) and water known as (PCE-10) has been developed and evaluated. The properties and its application for air conditioning systems have been examined during both the storage and discharge period in a dedicated test rig. The results indicate good stability and low sub-cooling behaviour but the viscosity was much higher than that of water. Further improvement and experimental studies into its flow characteristics is however being encouraged.