The concept of Green building is gaining importance in the present energy scenario and related environmental issues. Free cooling or ventilation cooling is truly a green concept since even 1g of carbon is not burnt for the purpose of cooling. Also it ensures that a good indoor air quality is maintained in the building. In this paper a detailed review of work carried out by various researchers on free cooling or ventilation cooling is presented. In addition the major challenges and facts posed in the use of phase change material for free cooling system design such as thermal resistance of air and phase change materials, geometry of encapsulation are discussed in detail. Also the method of energy efficient charging and discharging, effect of phase change temperature, insulation and geographical location are also discussed in this paper. This paper also provides lists the PCM candidates used for free cooling.