COMMISSION STAFF WORKING DOCUMENT Country Factsheet Portugal Accompanying the document COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE, THE COMMITTEE OF THE REGIONS AND THE EUROPEAN INVESTMENT BANK State of the Energy Union
Date: 2015-11-18
Institutions: European Commission, Secretariat-General
Subjects: Portugal, competitiveness, economic and social cohesion, electrical energy, energy policy, gas, innovation, reduction of gas emissions, regional cooperation, single market

EN 

   EN 

   EUROPEAN COMMISSION  Brussels, 18.11.2015  SWD(2015) 235 final   COMMISSION STAFF WORKING DOCUMENT Country Factsheet Portugal Accompanying the document COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE, THE COMMITTEE OF THE REGIONS AND THE EUROPEAN INVESTMENT BANK State of the Energy Union {COM(2015) 572} {SWD(2015) 208 à 209} {SWD(2015) 217 à 234} {SWD(2015) 236 à 243}  
 
 
Towards an Energy Union  
         Portugal 

Macroeconomic relevance of energy 

IMPORTANCE OF THE ENERGY SECTOR 

The macroeconomic significance of the energy sector in Portugal is relatively limited compared to the 
EU average, in terms of share of total employment. In contrast it is relatively higher in terms of share 
in  gross  value  added.  However  while  the  share  of  energy  in  Portugal's  gross  value  added  has 
increased  (0.8  percentage  points)  considerably  between  2005  and  2011,  the  share  in  total 
employment has instead decreased (0.3 percentage points) over the same period.   

Source: EUROSTAT – National Accounts 

According to EurObserv'ER, in 2013, the share 
indirect  renewable  energy 
of  direct  and 
related  employment  in  total  employment  of 
the  economy  in  Portugal  was  at  about  0.3%, 
below the EU average of 0.5%. 

Source:  European  Commission,  based  on  EurObserv'ER  and 
EUROSTAT 

TRADE BALANCE OF ENERGY PRODUCTS 

Between  2006  and  2014,  the  overall  energy  trade  deficit  of  Portugal  was  considerably  higher  than 
that  of  the  EU28.  The  largest  components  of  the  deficit  are  the  oil  and  natural  gas  trade  balance, 
both  in  2006  and  in  2014,  but  they  presented  a  diverging  path  throughout  this  period.  The 
deterioration  of  the  natural  gas  energy  trade  deficit  in  2014  was  outweighed  by  the  improved  oil 
trade  balance  and  left  the  energy  trade  deficit  relatively  constant.  Despite  the  stable  energy  trade 

0123420052011PTEU27Value added of energy sector% of grossvalue added (total economy)0.00.20.40.620052011PTEU27Employment in energy sector% of total employment 
 
 
 
 
 
 
 
 
 
 
 
Towards an Energy Union - Portugal 

deficit,  the  country  moved  from  a  current  account  deficit  in  2006  of  10.9%  of  GDP  to  a  current 
account surplus in 2014 of about 0.3% of GDP. 

Source: EUROSTAT 
Note: Current account balance for EU28 from European Commission (AMECO) 

1. Energy Security, solidarity and trust 

ENERGY MIX 

The energy mix of Portugal differs from the one of the EU-28, with the notable difference of a much 
higher share of oil and petroleum products and – to a lesser extent – renewable energy. Compared to 
1995, the share of gases sharply increased, more than EU average (from less than 1% to 18% of gross 
inland energy consumption), as well as the renewables share (by 10 percentage points). The share of 
solid  fuels  only  slightly  decreased  (by  6  percentage  points).  The  main  decrease  concerns  oil  and 
petroleum and products (by 23 percentage points). 

Gross inland energy consumption in 2013  

Source: European Commission, based on EUROSTAT  

IMPORT DEPENDENCY 

Portugal has a high import dependency ratio1, although it has decreased between 2005 and 2013. It is 
particularly high for petroleum products and natural gas. At the same time, Portugal imports gas (and 

1   Note: A dependency rate in excess of 100% indicates that energy products have been stocked. 

2 

-12-10-8-6-4-202PTEU28% of GDPCoalOilElectricityGasC. A. BalanceTrade balance of energy product and currentaccount balance, 2006 -12-10-8-6-4-202PTEU28% of GDPCoalOilElectricityGasC. A. BalanceTrade balance of energy product and currentaccount balance, 2014  
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                                 
Towards an Energy Union - Portugal 

oil) from a relatively well balanced range of import sources2 thanks to the LNG terminal in Sines and 
the possibility to take advantage of the supply diversification in the Spanish market, leading to a low 
country supplier concentration index.  

Source: European Commission, based on EUROSTAT  

2. A fully-integrated internal energy market 

INTERCONNECTIONS 

(PCIs) 

Interests 

The electricity interconnection capacity was 7% in 2014. It should 
increase  to  12%  in  2016  thanks  to  the  commissioning  of  the 
current  Projects  of  Common 
(e.g.  Spain 
interconnection  between  Vila  Fria  and  Beariz).  New  PCIs  are 
necessary  to  reach  a  15%  interconnection  capacity  by  2030.  In 
addition,  there  is  a  need  to  strengthen  the  interconnection 
capacity  between  Spain  and  France  to  plug  the  Iberian  Peninsula 
into the internal energy market. 
The Madrid declaration in the context of the High Level Group on 
the interconnectivity of the Iberian Peninsula identifies 3 projects: 
Biscay  Bay  project  (this  HVDC  subsea  cable  between  Spain  and 
France  is  one  of  the  33  key  security  of  supply  infrastructure 
projects,  which  will  double  the  interconnection  capacity  of  the 
Iberian  peninsula  to  above  5000  MW),  and  two  projects  through 
the Pyrenées - not yet PCIs.  
The Portuguese natural gas system has three entry points: an LNG 
terminal at Sines and two interconnections with Spain. The key gas 
project  for  Portugal  is  the  3rd  interconnection  point  with  Spain, 
which 
Spain-France 
interconnection point between the Iberian Peninsula and France at 
Le  Perthuis  (MidCat,  listed  as  key  infrastructure  project  in  the 
European Energy Security Strategy (EESS)).  

to  Eastern  Axis 

closely 

linked 

is 

Source: European Commission based on 
ENTSO-E scenario outlook and adequacy 
forecast 2014 
Note: Reference to 2030 target is based 
on  October  2014  European  Council 
conclusions 
"the 
stating 
Commission will also report regularly to 
the European Council with the objective 
of arriving at a 15% target by 2030" 

that 

2  

Top non-EU gas suppliers table is based on EUROSTAT data. The share of imports from non-EU countries is calculated 
as the ratio between volumes of imports from that specific non-EU supplier and total imports  (from EU and non-EU 
countries). 

3 

Top non-EU gas suppliers in 2013 (% in total imports)PortugalEuropean Union country[%]country[%]Algeria49.4Russia39.0Nigeria24.3Norway29.5Not specified9.7Algeria9.7Qatar7.3Qatar6.789%74%102%97%104%102%52%53%82%87%57%65%200520132005201320052013All fuelsPetroleum andproductsNatural gasPTEU28Import dependency 2013 
 
 
 
 
 
 
 
                                                                 
Towards an Energy Union - Portugal 

ELECTRICITY AND GAS MARKETS 

Market concentration index for power generation (left) 
and gas supply (right) (2013) (Herfindahl index – 10000 means 
monopoly) 

Sources: European Commission based on ESTAT, CEER and Platts 
Power Vision 

Sources:ESTAT and European Commission Calculations 

Concentration  on  power  generation  and  gas 
supply markets are at a high level, but slightly 
below  EU  average.  Wholesale  electricity 
prices  are  slightly  above  EU  average.  In  the 
gas sector, wholesale market development is 
still constrained partly as a result of the slow 
integration with the Spanish market.  
In  the  retail  market,  regulated  tariffs  are 
being phased out gradually until 2017. Major 
energy  companies  still  have  a  market  share 
between 85% and 95% of the retail electricity 
and gas markets. However, some progress in 
the  liberalisation  of  the  electricity  and  gas 
markets has been made. 
Domestic  electricity  prices  grew  on  average 
by  7.8%  between  2008  and  2012  and  being 
among  the  highest  in  Europe.  Also  domestic 
gas prices were one of the highest in Europe.   
In  2013,  Portugal  had  its  highest  provider 
switching  rate  in  the  electricity  market  for 
domestic  consumers.  Natural  gas  consumers 
have  also  the  ability  to  switch  their  gas 
provider.  Consumers'  overall  assessment  of 
the retail electricity market was below the EU 
average3.  
Smart metering pilot projects continue while 
the Cost Benefit Analysis is to be revised. 

CONTRIBUTION OF ENERGY TO CONSUMER PRICE EVOLUTION 

The inflation rate in Portugal followed a broadly similar pattern with the average inflation rate of 
the  Euro  area  between  2005  and  2014.  However,  in  2009  it  presented  a  considerably  stronger 
decrease than the EU28 average. Since the end of 2012, both energy and non-energy components 
contributed  to  disinflationary  pressure  for  Portugal  and  for  the  Euro  area  as  a  whole,  but  the 
declining slope was much steeper for Portugal.  

3  
http://ec.europa.eu/consumers/consumer_evidence/consumer_scoreboards/10_edition/index_en.htm 

10th Consumer Markets Scoreboard (June 2014),   

4 

 
 
 
 
 
 
 
 
 
                                                                 
Towards an Energy Union - Portugal 

Source: DG ECFIN based on Eurostat 

VULNERABLE CONSUMERS 

Source: European Commission, based on on EUROSTAT SILC survey 

Based  on  a  Eurostat  survey  on  income  and 
living conditions, three indicators are used to 
assess  fuel  poverty.  On  this  basis,  three  in 
every  ten  households  lived  in  dwellings  with 
leakages  and  damp  walls  while  a  slightly 
lower  proportion  of  households  was  unable 
to  keep  their  homes  adequately  warm.  This 
indicates a relatively acute issue for Portugal 
in  this  respect.  Portugal  maintains  public 
service  obligations  to  vulnerable  customers 
who  retain  the  right  to  access  the  regulated 
tariff  with  a 
increase 
established  by  the  government.  Social  tariffs 
have  also  been 
implemented  to  support 
customers meeting the eligibility criteria. 

limited  annual 

3. Energy Efficiency and moderation of energy demand 

ENERGY EFFICIENCY TARGET 2020  
(22.5 Mtoe primary energy and 17.4 Mtoe final energy) 

Portugal's  EU  2020  energy 
efficiency  target  is  22.5  Mtoe 
expressed 
in  primary  energy 
consumption  and  17.4  Mtoe 
final energy use. 

If the trend in primary and final 
energy  consumption  observed 
in  the  period  2005-2013  will 
continue  up  to  2020,  Portugal 
would  meet  its  national  target, 
which  could  have  been  set  at 
much more ambitious level.  

 Source:  European  Commission,  based  on  EUROSTAT  and  on  national  energy  efficiency 

targets as declared by the MS under the EED 

5 

-10123420052007200920112013% increase on a year earlierNon EnergyEnergyAll itemsPortugal : Price evolution & the contribution of energy prices-10123420052007200920112013% increase on a year earlierNon EnergyEnergyAll itemsEA : Price evolution & the contribution of energy prices 
 
 
 
 
 
 
 
 
 
 
 
Towards an Energy Union - Portugal 

ENERGY INTENSITY 

Primary energy intensity in Portugal has decreased in line with EU28, and remains close to average. 
However,  only  a  low  energy  intensity  reduction  is  recorded  in  the  industrial  sector,  which  remains 
above EU average.  

Primary energy intensity of the economy      

Final energy intensity in industry

Source: European Commission based on  EUROSTAT and European 

Source: European Commission based on  EUROSTAT 
and European Commission/AMECO 

Commission/AMECO 
Specific energy consumption by households is  much below EU average and decreased sharply since 
2010.  This  can  be  the  result  of  a  conjunction  of  factors,  including  fuel  poverty  issues.  The  specific 
energy intensity of passengers cars increased between 2005 and 2010 . The specific energy intensity 
for  freight  transport  also  increased  between  2005-2010,  i.e.  from  the  same  unit  of  energy  fewer 
tonnes of good are transported and/or on shorter distances. 
Final energy consumption per m2in residential 
sector, climate corrected 

Specific energy intensity for passenger cars and 
freight transport4  

Source: European Commission based on  Odyssee database 

Source: PRIMES model background data and estimations based on EU 
Commission and EU MS inputs   

EU legislation sets mandatory CO2 emission reduction targets for new cars and vans. By 2021, the 
fleet average to be achieved by all new cars is 95 g/km  of CO2. For new vans, the fleet average is set 
at 147 g/km by 2020. 

4  

Statistics  on  energy  demand  for  passengers  and  freight  transport  are  not  available  and  model  estimates  have  been 
used instead. These issues should be borne in mind when comparing energy intensity in freight or passenger transport 
between Member States, which should be regarded as merely indicative. 

6 

 
 
 
 
 
 
 
 
 
                                                                 
Towards an Energy Union - Portugal 

Source: European Environmental Agency. 2014 values are provisional. 2013 EU average refers to EU-27. 

Regarding transport performance, in EU-28 the inland freight modal shares are 71% by road, 17% by 
rail, 7% by inland waterways and 5% by pipelines. The respective inland passenger modal shares are 
82% by private car, 9% by buses and coaches, 7% by railways and 2% by tram and metro.     

Modal share Portugal 

Source:  Eurostat  and  EU  transport  in  figures  2015.  Data  refers  to  2013.  Modal  shares  based  on  tonne-kilometres  for  freight  sector  and 
passenger-kilometres for passenger sector, freight data based on activity within country territory. Estimates are made when data is missing. 

4. Decarbonisation of the economy 

NON-ETS GHG EMISSION REDUCTION TARGET 2020  
(+1% by 2020 as compared to 2005 in the non-ETS sector) 

to 

and 

2005 

between 

Portugal has decreased its emissions by 
23% 
2014 
approximated data. 
According 
its  2015  projections, 
Portugal  is  expected  to  reach  its  2020 
target,  with  a  margin  of  26%  as 
compared to 2005.  
Non-ETS Emissions 
(vs. 2005) 

Projections/proxy 

target 

Source: European Commission  based on EEA. Based on preliminary inventory 
data. 

ESD  (Effort  Sharing  Decision)  emissions  are  the  emissions  from  sectors  not 

covered by the EU ETS. 

Projections with 
existing measures 
2020 

Proxy 2014 

-25% 

-23% 

+1% 

-2% 

7 

 
 
 
 
 
 
 
 
 
 
 
 
 
Towards an Energy Union - Portugal 

RENEWABLE ENERGY SHARE TARGET 2020 (31%) 

In 2013 the renewable energy share in gross 
final  energy  consumption  was  25.7%,  and 
therefore  Portugal  seems  to  be  on  track  to 
reach  its  31%  target  in  2020.  However, 
Portugal may need to intensify its efforts, as 
the 
towards  2020  becomes 
steeper  over  the  coming  years.  Moreover, 
Portugal  is  lagging  behind  fulfilment  of  the 
renewables in the transport sub-target.  

trajectory 

Source: European Commission based on  EUROSTAT 

GREENHOUSE GAS EMISSION INDICATORS 

  Emissions per capita in Portugal are significantly lower than the EU average.  
 

In 2014, the revenues from the auctioning of ETS allowances amounted to EUR 67 million, 
most of which have been allocated to further develop the renewable energy sector. This in 
line with Portugal's efforts to reduce dependency on fossil fuels, which have led to a steady 
increase in the share of renewables in recent years. 

Largest Sectors of GHG 
Emissions in 2012 (*) 

Energy/power industry  

Transport 

Industry  

Agriculture (incl. forestry & 
fishery) 

Residential & Commercial 

Waste & others 

Portugal 

EU 
Average 

27% 

25% 

19% 

12% 

5% 

12% 

33% 

20% 

19% 

12% 

13% 

3% 

GHG Emissions 

Portugal 

EU 

EU ETS auctioning  
revenues in 2014 (EUR 
millions) 

Share of ETS emissions in 
2013 

GHG emissions/capita in 
2013 (tCO2equivalent) 
Carbon intensity of the 
economy in 2013 
(tCO2equivalent/(EUR 
millions ) 

67.1 

3205 

39% 

42% 

6.2 

8.5 

388 

328 

Source: European Commission  based on EEA 
(*)Sectoral breakdown for 2013 data not available 

ENERGY & TRANSPORT TAXATION 

In  2005  energy  and  transport  related  taxes  as  a  share  of  GDP  amount  to  3%,  which  is  significantly 
higher than the EU-average during the same period. This is mainly due to high taxation of transport 
vehicles  (0.9%)  and  transport  fuels  (1.9%),  while  the  taxes  on  electricity  and  heating  fuels  were 
relative lower. In contrast in 2012 the overall taxation of energy and transport fuels is in line with the 
EU-average, due to the significant decrease in the taxation of transport vehicles. 

8 

 
 
 
 
 
 
 
 
 
 
 
 
Towards an Energy Union - Portugal 

Source: Eurostat 

5. Research, innovation and competitiveness 

RESEARCH AND INNOVATION 

Portugal is close to the EU average, above the US and below Japan and South Korea in terms of public 
support  allocated  to  research  and  innovation  in  the  field  of  sustainable  energy,  low-carbon  and 
environment. In terms of intensity of low-carbon technologies patents, Portugal is much behind the 
EU  average  and  main  worldwide  partners.  Portugal  gives  high  policy  relevance  in  their  research 
efforts  to  e.g.  increasing  energy  efficiency  and  developing  ocean  energy.  Portugal  also  aims  at 
developing leadership as regards electric mobility.  

Source: European Commission based on  EUROSTAT   

COMPETITIVENESS 

The  real  unit  energy  costs5 in  Portugal  are  slightly 
below  the  EU  average,  but  well  above  the  US 
average.    No  reliable  data  can  be  used  to  break 
down this trend between energy prices and energy 
intensity factors. 
However, it can be noted that electricity prices paid 
by industrial customers are in line with EU average, 
while  gas  prices  are  among  the  highest,  and  well 
above  OECD  average  and  other  main  trading 
partners.  

Real unit energy costs (% of value added) 

Source: European Commission 

5  

This indicator measures the amount of money spent on energy sources needed to obtain one unit of value added. 

9 

0.01.02.03.0PTEU-28Energy & Transport related taxes % of GDP, 2005TransportvehiclesTransport fuelHeat &Electricity0.01.02.03.0PTEU-28Energy & Transport related taxes % of GDP, 2012TransportvehiclesTransport fuelHeat &Electricity8.49.58.212.313.28.812.313.78.00246810121416PTEU27US200020092011 
 
 
 
 
 
 
 
 
 
 
                                                                 
Towards an Energy Union - Portugal 

Source: European Commission based on EUROSTAT and IEA 

6. Post-2020 Energy and Climate policy Strategy  

COMPREHENSIVE MEDIUM TO LONG-TERM STRATEGY (post-2020) 
FOR CLIMATE AND ENERGY  

  Portugal  recently  agreed  on  a  Strategic  Framework  integrating  both  Energy  and  Climate 
covering  the  post-2020  period.  This  framework  includes  revised  targets  for  climate  and 
energy for the period 2013-2020, addressing mitigation policy, and an outlook to 2030.  
  Furthermore, earlier this year, the government approved the Green Growth Strategy which 
aims to include the climate and energy objectives up to 2030 and the targets included in the 
National Climate Change Programme and the National Adaptation Strategy. Additionally, this 
framework foresees the establishment of an inter-ministerial Commission for Air and Climate 
Change  in  order  to  ensure  the  engagement  by  the  government  and  promote  sectorial 
cohesion, accountability and integration of policies. 

  A Low Carbon Roadmap 2050 has been elaborated in 2012. Its aim is to analyse the technical 
and  economic  viability  of  GHG  emission  reduction  pathways  up  to  2050  consistent  with 
overall EU objectives. The Roadmap supports strategic planning and development of national 
emission reduction plans and provides high-level long term guidance for climate policy. 

NATIONAL TARGETS, especially for 2030 

Objective, 2030-2050 
GHG reduction  

Targets 

30%-40% 
MtCO2) for 2030 

(62-53 

Renewable energy  

40%  of  final  energy 
consumption by 2030 

Energy  Efficiency 
savings 

/ 

Decrease  the  energy 
intensity  to  101  toe/ 
millionEUR 
in 
2030 

  GDP 

Comments 
According to the National Low Carbon Roadmap 
2050,  it  is  possible  to  define  trajectories  to 
achieve a GHG reduction of 50% to 60% by 2050 
compared to 1990 levels. 
The  Green  Growth  Strategy  established  as 
target  30%-40%  reduction  of  CO2  emissions 
(62-53 MtCO2) for 2030. 
The  National  Low  Carbon  Roadmap  foresees 
that  60  to  85%  of  electricity  produced  in  2050 
will come from renewable sources. 
The  Green  Growth  Strategy  established  as 
target  40%  share  of  final  energy  consumption 
from renewable energy sources by 2030. 
The  Green  Growth  Strategy  is  established  as 
target  a  decrease  in  energy  intensity  to  122 
toe/millionEUR  GDP 
in  2020,  and  101 
toe/millionEUR GDP in 2030. 

10 

 
 
 
 
 
 
 
 
 
 
Towards an Energy Union - Portugal 

7. Regional cooperation 

Regional  cooperation  on  infrastructure  development  is  necessary  to  optimise  the  identification  of 
regional infrastructure priorities and to coordinate cross-border investments. Portugal is a member 
of  2  Regional  Groups  which  have  been  established  under  the  TEN-E  Regulation:  North-South  Gas 
interconnections in Western Europe and North- South electricity interconnection in Western Europe.  

Portugal  is  a  member  of  the  High  Level  Group  on  the  interconnectivity  of  the  Iberian  Peninsula, 
formalised in consequence of the Madrid Summit which led to the Madrid Declaration, which aims to 
tackle  the  existing  interconnection  issues  both  for  electricity  and  gas  through  the  adoption  of  an 
Action Plan. 

8. Cohesion policy contribution  

The EU Cohesion policy provides for important investment possibilities  to implement energy policy 
objectives  in  Portugal  which  will  be  complemented  by  national  public  and  private  co-financing, 
aiming at optimal leverage. It also ensures integrated territorial solutions to challenges by supporting 
capacity building, technical assistance and territorial cooperation. 

Internal energy market: Over 2014-2020, EU Cohesion Policy will invest some EUR 6 million in energy 
storage  pilot-projects  and  natural  gas  supply  stations  to  urban  collective  public  transport  vehicles. 
Around  EUR  120  million  is  also  planned  for  investments  in  smart  electricity  distribution  grids  in 
Portugal.  These  investments  are  expected  to  contribute  to  around  1  200  000  additional  users 
connected to smart grids. 

Energy  efficiency:  Over  2014-2020,  EU  Cohesion  Policy  will  invest  some  EUR  817  million  in  energy 
efficiency improvement for public and residential buildings and productive processes in enterprises 
in Portugal. A further estimated EUR 1 317 million will be invested in supporting the move towards 
an energy-efficient, decarbonised transport sector. These investments are expected to contribute to 
around  28  000  households  with  improved  energy  consumption  classification  and  a  decrease  of 
around 830 463 000 kWh per year of primary energy consumption in public buildings, as well as to 
around 260 km of reconstructed or upgraded railway lines. 

Decarbonisation:  Overall,  the  EU  Cohesion  Policy  investments  in  Portugal  over  2014-2020  are 
expected to contribute to an estimated annual decrease of GHG of around 215 000 tonnes of CO2eq. 
Over  2014-2020,  EU  Cohesion  Policy  will  invest  some  EUR  159  million  in  renewable  energy  in 
Portugal. This  funding will  be  complemented  by  national public  and  private  co-financing,  aiming at 
optimal  leverage.  These  investments  are  expected  to  contribute  to  around  80  MW  of  additional 
capacity of renewable energy production. 

innovation  and  competitiveness:  Over  2014-2020,  EU  Cohesion  Policy  will 

Research, 
invest 
significantly  in  R&I  and  in  SME  competitiveness  in  Portugal.  This  will  be  based  on  the  national 
strategy as well as regional strategies for smart specialisation. For Portugal, the strategies include a 
focus  on  innovative  technologies  for  the  production  of  renewable  energy,  more  efficient  industrial 
processes in terms of use of energy and promoting R&I applications for low-carbon urban mobility. 
At this stage, at least EUR 383 million is foreseen for investments in R&I and adoption of low-carbon 
technologies in Portugal, but this might increase further in line with the evolving content of the smart 
specialisation strategy. 

11