Realising the Potential of the Outermost Regions for Sustainable Blue Growth

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Realising the potential of the Outermost Regions for sustainable blue growth

ANNEX 8 TO THE FINAL REPORT THE BLUE ECONOMY IN MADEIRA

Written by COGEA srl, in partnership with AND International, Fundación AZTI and Poseidon Aquatic Resources Management Ltd September – 2017

EUROPEAN COMMISSION Executive Agency for Small and Medium-sized Enterprises (EASME) Department A – COSME, H2020 SME and EMFF Unit A3 - EMFF

E-mail: [email protected]

European Commission B-1049 Brussels

Realising the potential of the Outermost Regions for sustainable blue growth ANNEX 8 TO THE FINAL REPORT — THE BLUE ECONOMY IN MADEIRA

Realising the potential of the Outermost Regions for sustainable blue growth

ANNEX 8 TO THE FINAL REPORT THE BLUE ECONOMY IN MADEIRA

Executive Agency for Small and Medium-sized Enterprises (EASME) European Maritime and Fisheries Fund (EMFF) 2017 EUR [number] EN

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LEGAL NOTICE This document has been prepared for the European Commission however it reflects the views only of the authors, and the Commission cannot be held responsible for any use which may be made of the information contained therein. More information on the European Union is available on the Internet (http://www.europa.eu). Luxembourg: Publications Office of the European Union, 2017 ISBN 978-92-9202-296-9 doi: 10.2826/2810 © European Union, 2017

Realising the potential of the Outermost Regions for sustainable blue growth ANNEX 8 TO THE FINAL REPORT — THE BLUE ECONOMY IN MADEIRA

Contents

Mapping economic activities ...... 1 1. Identification and mapping of economic activities ...... 1 2. Synergies and tensions between maritime activities ...... 22 3. Best practices and flagship projects ...... 25 4. Gap analysis ...... 26

Mapping actors and maritime strategies...... 31 5. Mapping public authorities ...... 31 6. Summary of existing maritime strategies ...... 33 7. Mapping main stakeholders ...... 35

Mapping Blue Growth and assessing the potential...... 37 8. Growth drivers and barriers ...... 37 9. Future potential for mature and pre-developing activities ...... 44 10. Investments opportunities ...... 52

Identifying public and private intervention ...... 53 11. Potential financial, legislative and non-legislative measures for stimulating growth ...... 53 12. ORs potential contribution to IMP and BG initiatives ...... 59 13. Conclusions on concrete measures by type and timeframe ...... 61 14. Potential projects for the Atlantic Assistance Mechanism ...... 74

Roles and contributions to external initiatives ...... 75

List of interviewees ...... 75

Realising the potential of the Outermost Regions for sustainable blue growth ANNEX 8 TO THE FINAL REPORT — THE BLUE ECONOMY IN MADEIRA

List of acronyms

ARM Autonomous Region of Madeira CAGR Compound annual growth rate ANAM Aeroportos e Navegacao Aerea da Madeira — Airports and Air Navigation of Madeira APRAM Administração dos Portos da Região Autónoma da Madeira — Administration of the Ports of the Autonomous Region of Madeira ANA Aeroportos de Portugal — Portgual airports DREM Direção Regional de Estatística da Madeira — Regional Directorate of statistics of Madeira DRP Direção Regional de Pescas – Regional Directorate of Fishery EEZ Exclusive Economic Zone EMFF European Maritime and Fisheries Fund ERDF European Regional Development Fund FDI Foreign Direct Investment GVA Gross Value added INE Instituto Nacional de Estatística — National statistical Institute NACE Nomenclature statistique des activités économiques dans la Communauté européenne — Statistical nomenclature of the economic activities in the European Community OR Outermost region OT Overseas territory

Realising the potential of the Outermost Regions for sustainable blue growth ANNEX 8 TO THE FINAL REPORT — THE BLUE ECONOMY IN MADEIRA

Mapping economic activities 1. Identification and mapping of economic activities This chapter maps Blue Growth economic activities of the Autonomous Region of Madeira, according to the ‘Methodological notes for the definition of Maritime activities in ORs’. The CAGR (compound annual growth rate) has been computed for GVA, employment and turnover for the period 2010-2014. However, those figures are not available for all activities. In all those cases where data are not available, the activity has been described and analysed based on information collected through interviews. As data on H 51 Air transport are not available in the INE ‘Sistema de contas integradas das empresas’, we have used as a proxy, data related to the activity of the airports of the Autonomous Region of Madeira (source: ANAM — Madeira Airports / ANA — Aeroportos de Portugal, SA (Madeira Airports). About ‘Sea and coastal passenger water transport’, the annual share of the number of ferry passengers and cruise passengers on total passengers was applied to the GVA, employment and turnover related to ‘Sea and coastal passenger water transport’ NACE code. Table 1 — Evolution of the number of cruise and ferry passengers (2005-2015, no)

2007 2008 2009 2010 2011 2012 2013 2014 2015 Passengers Ferry (Madeira- 346 661 349 854 359 540 311 245 291 549 253 520 248 623 251 979 267 541 Porto Santo) Passengers Cruise 325 597 394 960 425 433 482 659 526 957 (transit) 581 661 472 362 473 415 576 627 TOTAL 672 258 744 814 784 973 793 904 818 506 835 181 720 985 725 394 844 168 % Ferry / 52% 47% 46% 39% 36% Total 30% 34% 35% 32% % Cruise / 48% 53% 54% 61% 64% Total 70% 66% 65% 68% Source: Passengers Ferry — Direção Regional de Estatística da Madeira, Inquérito ao Transporte Marítimo de Passageiros e Mercadorias (Regional Directorate of Statistics of Madeira, Survey on the Maritime Transport of Passengers and Goods) Passengers Cruise — APRAM, Administração dos Portos da Região Autónoma da Madeira (Administration of the Ports of the Autonomous Region of Madeira).

Realising the potential of the Outermost Regions for sustainable blue growth ANNEX 8 TO THE FINAL REPORT — THE BLUE ECONOMY IN MADEIRA

Table 2 — GVA of marine and maritime activities Mature (M) GVA vs pre- Group Sectors GVA CAGR develop. 2010 2011 2012 2013 2014 (P) activity Fisheries and aquaculture M 7 481 659 7 177 386 7 225 265 6 275 367 7 669 065 0.62% - A 03.11 Marine fishing M 3 526 413 4 572 423 5 394 085 4 150 600 4 772 741 7.86% (production) - A 03.21 Marine Living resources M 140 704 116 491 -8 294 148 973 141 326 0.11% aquaculture (production) - C 10.20 Processing and preserving of fish, M 3 814 542 2 488 472 1 839 474 1 975 794 2 754 998 -7.81% crustaceans and mollucs Extraction of aggregates - B 08.12 Operation of Non-living M 3 766 596 3 033 272 785 591 1 281 943 1 220 626 -24.55% gravel and sand pits; resources mining of clays and kaolin Desalination M na na na na na Maritime transport M 10 319 949 8 898 757 9 245 633 7 712 475 10 663 501 0.82% - H 50.10 Sea and coastal M 398 702 na na na 258 202 -10.29% passenger water transport - H 50.20 Sea and coastal M 9 921 247 8 898 757 9 245 633 7 712 475 10 405 299 1.20% Shipping freight water transport Ports (including dredging) M 269 746 851 497 684 585 721 064 713 213 -5.74% - H 52.10 Warehousing M na 623 756 465 448 482 268 460 622 -9.61% and storage services - H 52.24 Cargo handling M 269 746 227 741 219 137 238 796 252 592 3.51% Ship repair M 252 565 na na 312 230 372 335 10.19% - C 33. 15 Repair and Shipbuilding maintenance of ships and M 252 565 na na 312 230 372 335 10.19% boats Coastal tourism M 238 550 028 na 221 300 461 225 801 838 248 780 414 1.06% - I 55 Accommodation M 140 236 442 na 152 242 649 159 182 026 175 761 576 5.81% - I 56 Food and beverage M 70 411 586 na 43 309 812 41 781 812 42 766 838 -11.72% service activities Tourism - H 51 Air transport M 27 902 000 22 973 000 25 748 000 24 838 000 30 252 000 2.04% Cruise tourism M 623 612 na na na 479 519 -6.36% - H 50.10 Sea and coastal M 623 612 na na na 479 519 -6.36% passenger water transport

Realising the potential of the Outermost Regions for sustainable blue growth ANNEX 8 TO THE FINAL REPORT — THE BLUE ECONOMY IN MADEIRA

Table 3 — Employment in marine and maritime activities Mature (M) Employment vs pre- Group Sectors GVA CAGR develop. 2010 2011 2012 2013 2014 (P) activity Fisheries and aquaculture M 634 654 516 534 552 -3.40% - A 03.11 Marine fishing M 399 476 429 434 438 2.36% (production) - A 03.21 Marine aquaculture Living resources M 6 6 12 15 15 25.74% (production) - C 10.20 Processing and preserving of fish, crustaceans M 229 172 75 85 99 -18.91% and mollucs Extraction of aggregates - B 08.12 Operation of gravel and Non-living M 103 96 78 62 57 -13.75% sand pits; mining of clays and resources kaolin Desalination M na na na na na Maritime transport M 222 120 101 112 139 -11.02% - H 50.10 Sea and coastal M 22 na na na 29 7.39% passenger water transport - H 50.20 Sea and coastal M 200 120 101 112 110 -13.88% Shipping freight water transport Ports (including dredging) M 4 6 6 5 5 -2.15% - H 52.10 Warehousing and M na 1 1 2 2 7.06% storage services - H 52.24 Cargo handling M 4 4 4 4 4 -5.30% Ship repair M 27 na na 27 28 0.91% Shipbuilding - C 33. 15 Repair and M 27 na na 27 28 0.91% maintenance of ships and boats Coastal tourism M 12 779 6 696 11 837 11 866 12 140 -1.27% - I 55 Accommodation M 6 248 6 060 6 009 6 122 6 226 -0.09% - I 56 Food and beverage M 6 220 6 395 5 538 5 488 5 667 -2.30% service activities Tourism - H 51 Air transport M 311 301 290 256 247 -5.60% Cruise tourism M 56 na na na 83 10.34% - H 50.10 Sea and coastal M 56 na na na 83 10.34% passenger water transport

Realising the potential of the Outermost Regions for sustainable blue growth ANNEX 8 TO THE FINAL REPORT — THE BLUE ECONOMY IN MADEIRA

Table 4 — Turnover of marine and maritime activities Mature (M) Turnover

vs pre- GVA Group Sectors develop. 2010 2011 2012 2013 2014 CAGR (P) activity Fisheries and aquaculture M 34 854 856 34 332 353 36 283 172 35 336 736 43 781 125 5.87% - A 03.11 Marine fishing (production) M 8 292 765 11 061 723 12 497 463 11 341 235 11 704 111 9.00% - A 03.21 Marine aquaculture Living resources M 1 966 122 774 884 1 452 685 2 423 354 2 858 877 9.81% (production) - C 10.20 Processing and preserving M 24 595 969 22 495 746 22 333 024 21 572 147 29 218 137 4.40% of fish, crustaceans and mollucs Extraction of aggregates - B 08.12 Non-living Operation of gravel and sand pits; M 12 013 632 10 181 393 3 962 813 3 489 908 3 520 429 -26.42% resources mining of clays and kaolin Desalination M na na na na na Maritime transport M 36 340 589 35 298 121 36 547 010 37 389 808 43 865 466 4.82% - H 50.10 Sea and coastal passenger M 951 177 na na na 992 227 1.06% water transport - H 50.20 Sea and coastal freight M 35 389 412 35 298 121 36 547 010 37 389 808 42 873 239 4.91% Shipping water transport Ports (including dredging) M 3 243 725 1 754 712 1 708 501 1 813 626 2 139 430 6.83% - H 52.10 Warehousing and storage M na 589 388 558 387 561 722 753 659 8.54% services - H 52.24 Cargo handling M 1 174 658 1 165 323 1 150 114 1 251 904 1 385 770 5.95% Ship repair M 816 507 na na 844 866 967 425 4.33% Shipbuilding - C 33. 15 Repair and maintenance of M 816 507 na na 844 866 967 425 4.33% ships and boats Coastal tourism M 528 801 060 38 247 000 481 679 574 503 871 102 537 736 994 0.42% - I 55 Accommodation M 282 189 259 na 296 833 629 316 090 721 341 864 601 4.91% - I 56 Food and beverage service M 197 108 801 na 149 004 945 149 279 381 156 768 393 -5.56% activities Tourism - H 51 Air transport M 49 503 000 38 247 000 35 841 000 38 501 000 39 104 000 -5.72% Cruise tourism M 2 438 915 na na na 2 834 933 3.83% - H 50.10 Sea and coastal passenger M 2 438 915 na na na 2 834 933 3.83% water transport Source: INE, Sistema de contas integradas das empresas (Business integrated account system) — SCIE A 03.11 Marine fishing – employment: INE PESCAS; A 03.21 Marine aquaculture – Turnover: Direção Regional de Pescas (DRP) I 55 Accommodation and I 56 Food and beverage service activities — employment 2011: SBS Eurostat H 51 Air transport: ANAM — Madeira Airports / ANA — Aeroportos de Portugal, SA (Madeira Airports)

Realising the potential of the Outermost Regions for sustainable blue growth ANNEX 8 TO THE FINAL REPORT — THE BLUE ECONOMY IN MADEIRA

Notes:  GVA and turnover are in EUR; Employment is expressed in number of units.  Maritime transport — data on H 50.10 Sea and coastal passenger water transport not available for years 2011, 2012 and 2013.  Ports — data on H 52.10 Warehousing and storage services not available for 2010; data on H 52.22 Service activities incidental to water transportation not available from 2011 to 2014. Therefore total Ports is underestimated.  Ship repair — data on C 33. 15 Repair and maintenance of ships and boats not available for 2011 and 2012.  Coastal tourism — data on I 55 Accommodation and I 56 Food and Beverage services activities not available for 2011; SBS Eurostat regional data for data on employment related to year 2011 of I 55 Accommodation and I 56 Food and Beverage services activities.  Cruise tourism — data on H 50.10 Sea and coastal passenger water transport not available for years 2011, 2012 and 2013; data on H 52.22 Service activities incidental to water transportation not available.  CAGR related to sectors Ports (including dredging), H 52.10 Warehousing and storage services and H 52.24 Cargo handling computed based on the period 2011/2014.  CAGR related to marine renewable energy computed based on the period 2012/2014. Data limitations derive from the application of the law on statistical confidentiality.

Realising the potential of the Outermost Regions for sustainable blue growth ANNEX 8 TO THE FINAL REPORT — THE BLUE ECONOMY IN MADEIRA

1.1 Fisheries and aquaculture Although fishing and its subsidiary activities, such as fish processing, constitute an industry with huge tradition, its contribution to gross value added and employment is quite limited. On average, in the period 2010-2014, fisheries and aquaculture (including processing industry) accounted for 0.5 % of total gross value added and around 0.9 % of total employment in Madeira. 1.1.1 Overview Fisheries The archipelago of Madeira is conditioned by the natural characteristics, in particular the narrow continental shelf, which limits available habitats for coastal and demersal species and fishing methods. Furthermore, the waters around the Archipelago are extremely deep and have very low productivity, which sets limit for potential catch. Only sporadically, deep waters rich in nutrients come up with consequent increases in specific biological productivity. Therefore, the sea areas under Madeira jurisdiction do not have particularly high levels of fish stocks and are not rich in terms of variety of fish stock. Figure 1 – Evolution of total landings in volume and value (2010-2015, kg, €)

8 000 18

7 000 16

6 000 14 12 5 000 10 4 000

8 Tonnes 3 000 million€ 6 2 000 4 1 000 2 - 0 2010 2011 2012 2013 2014 2015

Value Volume

Source: Direção Regional de Estatística da Madeira (DREM); Direção Regional de Pescas (DRP) The main exploited species consist of deep-water fishes and migratory pelagic fish: black scabbard fish represents almost 46 % of the Madeiran landings in value and around 36 % in volume, and tuna and tuna-like species around 42 % of the total value of landings and 46 % of the total volume. The Madeira’s fishing of black scabbard fish has unique characteristics because this fish is caught far away from the coast and from 1 000 mt depth. Catches of tuna fish are characterized by strong fluctuations during the year resulting from the variability of oceanic environmental conditions that determine the migratory routes of these species.

Realising the potential of the Outermost Regions for sustainable blue growth ANNEX 8 TO THE FINAL REPORT — THE BLUE ECONOMY IN MADEIRA

Table 5 — ARM total landings by species 2010-2015 (euro, %) 2011 2012 2013 2014 2015

euro % euro % euro % euro % euro %

Black 5 816 702 53.64 5 255 604 41.46 5 312 299 48.65 6 230 069 37.33 7 172 447 45.87 scabbard fish Tuna and tuna-like 3 358 012 30.97 5 761 168 45.45 4 296 129 39.34 9 278 998 55.59 6 986 999 44.69 species Horse 200 232 1.85 212 041 1.67 183 747 1.68 192 232 1.15 196 644 1.26 mackerel Mackerel 504 585 4.65 515 697 4.07 502 326 4.60 414 908 2.49 346 039 2.21

Dogfish 147 220 1.36 177 128 1.40 114 340 1.05 85 129 0.51 0 0.00

Other 817 077 7.53 754 604 5.95 511 108 4.68 489 884 2.93 932 707 5.97

Total 10 843 828 100 12 676 241 100 10 919 948 100 16 691 221 100 15 634 836 100 Source: Direção Regional de Estatística da Madeira (DREM); Direção Regional de Pescas (DRP)

Table 6 — ARM total landings by species 2010-2015 (kg, %) ∆% 2010 2011 2012 2013 2014 2015 2015/2010 Black scabbard fish 1 860 306 1 940 868 1 716 432 1 757 625 1 913 226 1 901 673 2.2 Tuna and tuna-like 1 859 941 1 368 073 3 156 097 1 611 666 4 905 149 2 761 106 48.5 species Horse mackerel 171 982 243 329 164 768 140 056 139 536 318 739 85.3

Mackerel 377 985 485 441 350 663 429 453 359 771 438 829 16.1

Dogfish 212 037 204 655 160 233 71 390 55 034 -

Other 200 946 211 053 220 924 161 350 140 957 220 491 9.7

Total 4 683 197 4 453 418 5 769 116 4 171 540 7 513 673 5 640 839 20.4 Source: Direção Regional de Estatística da Madeira (DREM); Direção Regional de Pescas (DRP) Fishery is predominantly artisanal. In 2014, Madeira’s fleet was composed by 434 registered vessels. However, according to interviewees, the active fleet (licensed fishing vessels) is composed of around 100 vessels (the remaining vessels are inactive or do not exist anymore but are still registered). Most of the vessels are under 12 meters long: black scabbard fish fleet is composed of vessels of about (on average) 12 meters and tuna fleet of vessels of around 20 meters. The fleet consists mainly of wood vessels and the average age is more than 20 years. Table 7 – Evolution of the composition of the ARM fleet (2009-2014) ∆% 2010 2011 2012 2013 2014 2015 2015/2010 composition of the ARM fleet Vessels (No) 449 444 438 436 435 434 -3.3 GT(e) 3 982 3 979 3 908 3 909 3 911 3 984 0.0 POT(kw) 16 332 16 163 15 878 15 938 15 935 16 483 0.9 licensed fishing vessels Vessels (No) 137 119 114 106 98 99 -27.7 GT(e) 2 779 2 462 2 363 2 121 2 093 2 333 -16.0 POT(kw) 13 514 11 780 11 222 10 444 10 127 11 050 -18.2 Source: INE — Estatísticas da Pesca

Realising the potential of the Outermost Regions for sustainable blue growth ANNEX 8 TO THE FINAL REPORT — THE BLUE ECONOMY IN MADEIRA

In the last decade, the number of fishermen registered dropped by 28 %: it passed from 820 in 2005 to 588 in 2015. Nonetheless, a recovery has been registered in the last five years. Figure 2 – Evolution of fishermen registered in the ARM (2005; 2010-2015)

900 820 800

700 588 600 476 500 429 434 438 399 400

300

200

100

0 2005 2010 2011 2012 2013 2014 2015

Source: INE — Estatísticas da Pesca There is only one Producer’s Organisation that in 2015 grouped 88 vessels, representing 88 % of the licensed fishing vessels and around 80 % of the catches. Aquaculture The first aquaculture experience emerged in Madeira in the mid 1950s with the purpose of increasing the fish supply deficit in the regional market (and reduce fish imports). The development of the activity was also seen as an opportunity to create new forms of business. Marine aquaculture accounts for 0.01 % of total gross value added and around 0.02 % of total employment in Madeira. For the moment, it is an activity with slight economic weight but with a high potential due to favourable climatic and environmental conditions. The average temperature of the sea water in winter, standing above 17ºC, allows growth of fish and fattening cycles from 2 to 4 months shorter compared to other Atlantic coasts of Europe. At the beginning of the 90’s, the Regional Directorate of Fisheries conducted several studies to evaluate the potential of marine aquaculture in Madeira. The first offshore fish farm was installed in 1996, at the Abra Bay (Caniçal), by initiative of the Regional Directorate of Fisheries. The annual production capacity was of approximately 100 tonnes of fish. In order to fill the need of creating an infrastructure of technical support for the development of aquaculture, the Regional Government of Madeira created in 2000 the ’Centro de Maricultura’ in Calheta. Today, besides, the Center produces juveniles for the active companies and has a nursery where native species cultivation techniques are developed. The first fish farm was given in concession in 2004, through a public auction to a private company. The company has an offshore aquaculture production system of Sparus aurata. In 2005, a new open-sea fish farm was created in Ribeira Brava as an initiative of another company and in 2006 a third production unit was born in Ponta da Galé in the west coast of Madeira Island.

Realising the potential of the Outermost Regions for sustainable blue growth ANNEX 8 TO THE FINAL REPORT — THE BLUE ECONOMY IN MADEIRA

Table 8 – Evolution of aquaculture production (2010-2015)

Sales (Kg) Production kg ARM External

2010 436 916 113 673 323 243

2011 168 453 34 426 134 027

2012 315 801 99 032 216 769

2013 526 816 187 605 339 211

2014 621 495 248 598 372 897

2015 429 463 179 463 250 000

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 2010 2011 2012 2013 2014 2015

Production Sales (Kg) ARM Sales (Kg) External kg

Source: Direção Regional de Pescas (DRP) Although advantageous environmental conditions (water temperature allowing shorter fattening cycles relative to other Atlantic coasts), ARM faces price competition with large European and third Countries producers due to insularity costs (i.e. transport of the product, transport of inputs: feed and juveniles, and financial charges resulting from the immobilisation of stocks of raw materials). In order to partially compensate this cost disadvantage, Compensation Plan for Additional Costs of Fish Products in Madeira foresees an aid of 14.5 million euro for Madeira. Processing and preserving of fish, crustaceans and mollusc The crisis in tuna fishing (drastic reduction of biological resources) at the beginning of the 2000 decade led to the disappearance of the canning industry. Today the majority of fish caught in Madeira is for human consumption and the Processing industry lost it economic importance: it accounts for around 0.23 % of Madeira's gross value added and around 0.16 % of employment. 1.1.2 Geographical distribution Madeira has seven ports with auction markets, two of which (Funchal and Caniçal) have an important sales turnover. Around 80 % of landings are made in Funchal, and some 15 % in Caniçal. The remaining landings are made in other ports, the main ones being Câmara de Lobos and Porto Santo. As regards aquaculture, offshore cages are located in the east coast, Caniçal, and in the west coast, Ribeira Brava and Ponta da Galé.

Realising the potential of the Outermost Regions for sustainable blue growth ANNEX 8 TO THE FINAL REPORT — THE BLUE ECONOMY IN MADEIRA

1.1.3 Main socio-economic trends Fisheries In the last decade, the fishing effort has been largely reduced. The Region managed its fishing effort in order to reach a balance between fishing capacity and biological regeneration of the resources. In particular, black scabbard fish is characterised by an alarming and increasing scarcity in waters adjacent to the Region. This scarcity is forcing to look for fishing banks increasingly distant. Indeed, currently, most of the fleet is fishing in the Canary waters. According to interviewees, there is a fresh tuna trading company, situated in the Madeira free zone. This company rents vessels and trades catches directly in sea with Spanish companies. The evolution of the licensed fishing fleet in the last five years shows a clear decreasing trend, both in terms of the number of vessels and capacity. Such trend had no significant impact on total catches volume that, on the contrary, shows an increase (20 % in 2015 compared to 2010) (1). Indeed, catches levels proved to be inelastic relative to the fleet decrease, showing that in the past there was an oversized fleet relative to existing resources. The tuna landings in 2014 (exceptional good year) indicates that the current fishing capacity is able to adapt to years of exceptional abundance. Currently the main concern regards the need to renew (substitution) the existing vessels (average age above 20 years) presenting constant safety problems for the crews. Because of the reduction of the fishing effort, employment has been gradually decreasing. In the last decade, the number of fishermen registered dropped by 28 % between 2005 and 2015. The average age of fishermen is quite high (70 % is aged between 35 and 54 years old and 16 % is more than 55 years old (2)) and there is little turnover as marine fishing does not appear to be attractive for young people. Aquaculture In the last decade, aquaculture annual production has been increasing and two companies were created. The increase in regional production was a response to the increased regional consumption of Sparus aurata and the increasing demand at national and foreign level due to the recognized quality and competitive prices. Employment has been increasing (CAGR: +25 % between 2010 and 2014), but it should be mentioned that it is not a labour-intensive industry. In the attempt of diversifying production, other species are being tested for production in large scale cages. The ‘Centro de Maricultura’ has undertaken several research projects also in partnership with Madeira University, Oporto University, Universidad de Gran Canaria, etc, financed by European Regional Development Fund (ERDF). The Centre undertook two pilot projects, ‘+Peixe’ and ‘Pargogen’. The first one envisaged the technical and economic assessment of a pilot program implementation about fish repopulation with native species and the development of innovative technologies to revitalize the demersal fish communities of the Autonomous Region of Madeira. The ‘Pargogen’ project aimed at the development and improvement of seabream production techniques, through genetic selection. Currently, a pilot project concerning the bio certified production of Sparus aurata juveniles is ongoing.

(1) Source : Direção Regional de Estatística da Madeira (DREM); Direção Regional de Pescas (DRP) See Table 3 for more details (2) INE, Estatisticas da Pesca, 2015, https://www.ine.pt/xportal/xmain?xpid=INE&xpgid=ine_publicacoes&PUBLICACO ESpub_boui=261842006&PUBLICACOESmodo=2.

Realising the potential of the Outermost Regions for sustainable blue growth ANNEX 8 TO THE FINAL REPORT — THE BLUE ECONOMY IN MADEIRA

Processing and preserving of fish, crustaceans and mollusc Currently, in Madeira, the industry of fishery products processing is dedicated to filleting, packaging and freezing. The number of companies continues to decrease, from eight companies in 2010 to five companies in 2014, which led to a fall of employment: around -19 % in five years (CAGR 2010-2014). 1.1.4 Preliminary findings on growth potential Fisheries Considering the increasing scarcity of biological resources (i.e. black scabbard fish) and the constant changes of the migratory routes of tunas, (probably due to climate change and water temperature), the Region is studying the possibility of exploring new species commercially viable in terms of available quantities and intends to introduce procedures for disposing of fishery products with low commercial value and little demand. However, there is a lack of knowledge concerning biological resources, in particular at high depths (below 2000 meters). Technological means are limited and investigations costs are high. Aquaculture According to interviewees, there is a production growth trend. In June 2016, a partnership agreement with a large Portuguese agri-food group has been signed, in order to create a new aquaculture company. The project represents an investment of 4 million euros and it is foreseen that, in the initial phase, the new production unit will have a production capacity of 550 tonnes/year and should reach 1 200 tonnes/year within three years. The sector has an important role as it could largely contribute to the reduction of the pressure on the fishing stocks. Portuguese Strategy for aquaculture 2014-2020 intends to stimulate sustainable development of aquaculture. The strategy has set the following goals:  strengthen aquaculture competitiveness, the quality and diversification of products;  extend scientific knowledge, to improve the evaluation and utilization of resources. Processing and preserving of fish, crustaceans and mollusc As already mentioned the increasing scarcity of biological resources has obvious consequences on the processing activity, whose future growth prospects appeared limited.

1.2 Extraction of aggregates: operation of gravel and sand pits 1.2.1 Overview The extraction of aggregates is an activity that accounts for 0.1 % of total gross value added and around 0.09 % of total employment in Madeira. 1.2.2 Geographical distribution There is a specific port dedicated to this activity, namely Porto Novo, with a pier 100 m long and depths between 5 m and 11 m with an area of about 1000 m2 for receiving inert marine extraction. 1.2.3 Main socio-economic trends In the last decade, there was a strong decrease on gravel and sands consumption in ARM. Public authorities stated that in the 2000-2010 decade around 515 000 m3 of gravel and sands extracted in the archipelago coast were consumed and in the last years the volumes consumed decreased to around 150 000 m3 (corresponding to a decrease of around 70 % related to the average of the previous decade). This decrease in consumption led to a reduction of the extraction effort.

Realising the potential of the Outermost Regions for sustainable blue growth ANNEX 8 TO THE FINAL REPORT — THE BLUE ECONOMY IN MADEIRA

1.2.4 Preliminary findings on growth potential The weight of this economic sector is quite small. It is an activity requiring important capital investments and the current market conditions do not make it attractive for exploitation. The future growth of the activity remains therefore limited. 1.3 Desalination A desalination plant is operating in Porto Santo Island, securing fresh water to the entire island. Porto Santo Island in fact lacks of fresh water sources. The Desalination Centre has a total capacity of 6 900 m3/day (more than 2 million m3/year) and is considered sufficient to satisfy the needs (estimated in around 900 000m3/year for potable water and other sectors). The impact of this activity in terms of GVA is unknown, since no data is available. 1.3.1 Preliminary findings on growth potential The major problem of desalination is its high consumption of energy, together with the low productivity of the production units that results in high costs of exploration. From the captured water, only between 35 % and 40 % is transformed into drinking water. Indeed, around 55 % to 60 % of the fresh waters originate from the desalination process. Desalination is highly controversial in ARM because it is not, for the moment, a sustainable source of water and will probably not be a significant economic activity in the coming years.

1.4 Maritime transport 1.4.1 Overview Maritime transport (excluding cruises) accounts for 0.9 % of total gross value added and around 0.2 % of total employment in Madeira. Sea and coastal passenger water transport This activity accounts for 0.02 % of total GVA and for 0.047 % of total employment in Madeira. One ferry operator is active in Madeira and it connects Madeira Island and Porto Santo Island. The connection is assured by one company that in 1995 won a public tender to operate the sea transport line between the islands of Madeira and Porto Santo. In June 1996, the company acquired a ship in order to respond to the needs of this transport operation and the ship´s maiden voyage took place on June 1996. The ship transports both passengers and cargo: it has a capacity of 1 150 passengers and 150 vehicles. Nowadays, the company has established partnerships with two hotels in Porto Santo in order to offer travel packages. In 2008, a Spanish ship-owner inaugurated a new ferry line between the port of Portimão (mainland – Algarve) and Madeira. It was a weekly connection for passengers and vehicles. However, this ferry was closed subsequently (January 2012) because it was no more economically sustainable: low volume of goods, small number of passengers transported, high concentration of passengers during the summer months, and drastic decrease of airplane tickets costs (passing from 400 euros to 75 euros) not compensating a 30 hours’ trip by boat. At present, there is no passenger maritime connection with the mainland, so that the region depends entirely on air transport. Sea and coastal freight water transport According to interviewees there are currently five freight transport companies dealing with freight transportation between the mainland and Madeira, and a company dealing

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with passengers transportation and freight transportation between Funchal and Porto Santo Island (the ferry company). 1.4.2 Geographical distribution Maritime transport is concentrated in Funchal port: one ferry from/to Porto Santo and five companies dealing with freight transportation between Madeira and the mainland. 1.4.3 Main socio-economic trends Sea and coastal passenger water transport The analysis of the number of passengers in the last decade shows clearly the impact of the economic crises that affected Portugal since 2011. Between 2005 and 2009, the number of passengers grew 16 %, in 2010 it started to decrease and achieved the lowest number in 2013. If we consider the whole period, 2005-2015, the number of passengers decreased by 13 %. Figure 3 — Evolution of the number of cruise and ferry passengers (2005-2015, no)

400 000

350 000

300 000

250 000

200 000

number of passengersof number 150 000

100 000

2005 2006 2007 2008 2009 2011 2012 2013 2014 2015 2010 Source: Passengers Ferry — Direção Regional de Estatística da Madeira, Inquérito ao Transporte Marítimo de Passageiros e Mercadorias Although its social relevance and need, the ferry passenger transport is characterised by the high seasonality of tourism in Porto Santo (concentrated in June, July and August). Porto Santo Island is the favourite vacation destination for Madeira Islands inhabitants. Sea and coastal freight water transport Movements of freight in ARM ports have decreased by around 34 % in the las five years. This reduction could be explained by the economic crisis that have affected Portugal since 2011 and the pressure of international competition. Table 9 – Evolution of freight movements (2010-2015, tonnes)

Type of freight 2010 2011 2012 2013 2014 2015 containers 607 527 589 690 542 368 540 784 556 621 591 244 solid bulk 841 514 702 128 434 179 442 478 390 561 330 146 liquid bulk 392 765 389 869 347 789 351 816 310 749 312 779 general cargo 83 134 92 838 25 768 20 086 22 919 21 503 Total 1 924 940 1 774 525 1 350 104 1 355 164 1 280 850 1 255 672

Source: APRAM, Administração dos Portos da Região Autónoma da Madeira, SA. According to INE ‘Sistema de contas integradas das empresas’ data, the sector’s GVA presents an annual growth rate of 1.2 % against a negative annual growth rate of employment of almost 14 %. This could be explained by the fact that the international

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competition pushed transport companies to merge to larger groups ship-owners or to establish agreements in order to share boats and warehouses. 1.4.4 Preliminary findings on growth potential According to interviewees passenger traffic by ferry is again increasing, but its growth potential resulted limited. The ferry passenger transport is characterised by the high seasonality of tourism in Porto Santo and thus with a limited growth capacity. As regards freight transport, the activity supports the Free trade area in Caniçal and the overall supplies of the archipelago Madeira has lost its position of support base and service in the Atlantic, with the exception of cruises shipping. In the light of his, the growth potential of freight transport in Madeira is rather limited.

1.5 Ports 1.5.1 Overview ARM’s ports are under the jurisdiction of APRAM — Administration of the Ports of Madeira, SA — whose capital is entirely public. APRAM manages all port infrastructures dedicated to the movement of goods and passengers. In the last decade, ports infrastructures were object of an important investment program of modernisation. This investment program re-planned the entire harbour infrastructures leading to a specialisation of the most important ports as described in the table below.

Funchal It is the most important port of the region. It is situated near Funchal harbour historical centre and for a long time it was a freight and passenger port, a cruise port, a Marina and Yacht harbour and a fishing port. After the investment program of modernisation of harbour infrastructures, Funchal port has been dedicated mainly to tourism: cruise-shipping, ferry-boats to/from Porto Santo Island, marina (capacity of 260 mooring places). A cruise terminal was built and it has a capacity to receive simultaneously three cruise ships. It has also a fish unloading pier (100 m funds -4m), a fish auction, cold storage facilities, fuel supply facilities of and pier dedicated to patrol ships of the Portuguese Navy. It is, together with Porto de Santa Cruz de Tenerife (Canarias), the most important cruise port of this area of the Atlantic Ocean.

Caniçal After the investment program of modernisation of infrastructures, this harbour harbour became the main freight harbour of the archipelago. Main infrastructures are a bulk solid terminal and a container terminal. Cargo handling activities are carried out by private. It has a fish-unloading pier, a fish auction and a shipyard for little boats.

Porto Santo This harbour has been largely improved since the middle of last decade, harbour with the scope of enhancing international tourism in order to mitigate the Island dependence of seasonal tourism. It is a passenger terminal (ferry-boats), a cruise terminal and a container terminal, a marina for recreational nautical activities.

Specialised There are four specialised terminals: one for marine extraction activities, terminals two for cement loading and unloading and one for fuels.

Secondary There are other six secondary harbours. The most important is the ‘Cais harbours de Câmara de Lobos’ where the fishing activity is now concentrated.

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Marina and There are three Marina and Yacht harbours (Funchal – 260 mooring Yacht places, Quinta do Lorde – 264 places and Porto Santo – 139 places) and harbours two recreational ports (Machico and Calheta – 339 places) for a total of 1 092 mooring places. All these facilities are located in the southern part of the Islands as they are less exposed to sea waving and winds.

The figure below presents the evolution of the movement of vessels in the ARM ports that reflects the decrease the evolution of the movement of volumes of freight in ARM ports. Table 10 – Movement of commercial vessels in the ports of the Autonomous Region of Madeira, by type of vessel (2008 — 2014) 2008 2009 2010 2011 2012 2013 2014 Total Vessels (No) 3 185 3 115 3 070 3 093 2 661 2 531 2 475 Freight 1 131 1 017 956 875 709 736 711 Passenger (excluding cruise 1 504 1 541 1 534 1 601 1 275 1 217 1 192 passengers) Cruise passenger 550 557 576 613 677 576 572 Offshore activities 0 0 4 4 0 2 0 Source: DREM, Transport Statistics The charts below show how the specialisation of ARM main ports changed after the investment program of modernisation implemented by the Regional Government: Funchal harbour is now dedicated to tourism and Caniçal to freight movements. Figure 4 – Type of vessel by harbour (2004 and 2014, No)

2004 2014

Porto Santo Harbour Porto Santo Harbour

Caniçal Harbour Caniçal Harbour

Funchal Harbour Funchal Harbour

0 200 400 600 800 0 500 1 000 1 500 number of vessles number of vessles Cruise passenger Passenger Freight Cruise passenger Passenger Freight (excluding cruise passengers) (excluding cruise passengers) Source: DREM, Transport Statistics 1.5.2 Geographical distribution See § 1.5.1 above. 1.5.3 Main socio-economic trends The licensed harbour operators are two: one dealing with freight movement within the ports and one dealing with recruitment and selection of manpower. Moreover, there are around 40 small companies dealing with administrative and fiscal burden related to ships, incoming and departing freight, and warehousing. According to official regional statistics 162 persons in 2014 are employed in ports, a figure that has been decreasing since 2008 (183 persons employed).

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Table 11 – Persons employed in the main ports of the Autonomous Region of Madeira, by class (2008 — 2014)

Class 2008 2009 2010 2011 2012 2013 2014

Total 183 177 177 170 167 167 162 Senior staff 4 3 3 2 2 2 3 Middle technicians 7 7 8 7 7 7 7 Clerks and similar 67 64 64 63 52 51 49 Machine and facility operators and assembly workers 70 69 67 64 66 66 64 Unqualified workers 16 14 13 13 13 13 13 Other personnel 19 20 22 21 27 28 26 Source: DREM, Transport Statistics According to interviewees, the Funchal marina is overloaded and there is a long waiting list for renting mooring place rental. Considering that ARM has a strategic position in the Atlantic area as a crossroads of the Atlantic Ocean routes, this lack of mooring places is negative to the Island. Indeed, some specialised magazines advise Yachts crossing the Atlantic to avoid this infrastructure with negative consequences to the city image. 1.5.4 Preliminary findings on growth potential Good transport, accessibility and connectivity should guarantee the exploitation of the maritime opportunities. The main potential advantage could be found in the integrated offer where ports will be able to receive the largest intercontinental cargos and more boats. According to the National Ocean Strategy 2013-2020, and further to Europe 2020 Strategy, short-sea shipping should be promoted, enhancing the development of the port and shipping sector. Consequently, the entire sector will require a new re-planning linked also to the recent development of other sectors (recreational harbours) aimed at mitigating potential conflict in the use of maritime space.

1.6 Ship repair 1.6.1 Overview Ship repair activity in Madeira is concentrated in Funchal with a number of companies involved in repairing of engines, electric and electronic aspects and mechanical repairs. Repair facilities are rather limited and everything revolves around the yacht club (Clube Naval do Funchal). 1.6.2 Geographical distribution See § 1.6.1 above. 1.6.3 Main socio-economic trends The increasing flows of nautical tourism calling Madeira as destination has generated a positive growth trend of the activity, in terms of GVA (+10 %) and turnover (+4 %), while employment remained basically flat. 1.6.4 Preliminary findings on growth potential Being an activity supporting leisure tourism and fishing, not only ship repair presents a remarkable growth potential, but it is important for ensuring the sustainable development of other activities. New dedicated infrastructures should be dedicated to this activity, coordinating spaces with other maritime sectors sharing the same port areas. Furthermore, specialised repairs for yachts and sailing boats should be made available, with qualified personnel and specific material for ensuring adequate repairs (which actually is not always available).

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1.7 Coastal Tourism 1.7.1 Overview Tourism is the most important sector of regional economy. In 2014, its contribution to total GVA was almost 21 % and around 20 % of the archipelago’s total employment (3), with a considerable induced impact in the overall economies and spill-over effect on other sectors. Environment and landscape as well as the distinctive nature of the region are crucial for tourism. Tourism in Madeira has a centenary tradition and the archipelago is one the main tourism destinations in Portugal. Its sub-tropical mild climate and its exceptional variety of indigenous fauna and flora, makes the island a tourist destination throughout the year. The landscape and climate are the two main attributes of promotional campaigns. The region is known for the Madeira wine, gastronomy, historical and cultural value, its flora and fauna, landscapes (Laurel forest) which are classified as a UNESCO World Heritage Site and embroidery artisans. Its annual New Year celebrations feature the largest fireworks show in the world. Madeira Island has a naturalistic-oriented tourism and is visited all year long. One of the most important attractions are the ‘levadas’ (irrigation channels). In the sixteenth century, the Portuguese started building levadas to carry water to the agricultural regions. There are more than 200 ‘levadas’ surrounding the valleys and mountains, with a total of 3 000 km in the combined protected areas, including the Madeira Natural Park and the Funchal Ecological Park. Moreover, the New Year celebrations and the ‘Madeira Flower Festival’ are other important tourism attraction. Porto Santo Island has a more oriented seaside tourism with its golden sandy beaches. Tourism is therefore characterised by a high seasonality, concentrated in June, July and August, while in winter most accommodation structures are closed. To encourage tourism outside the high season, a golf course has been created and the government has established a subsidy for Madeira Island inhabitants who move to Porto Santo Island during the low season months. Therefore, during nine months, between October and June, it is possible to receive a subsidy of EUR 25 for buying a return ticket. Besides, to promote scuba-diving, the Corvette General Pereira d'Eca was sink in July in Porto Santo in order to create an artificial reef. 1.7.2 Geographical distribution Accommodation offer of Madeira Island is concentrated in the municipality of Funchal, especially in the Lido area. Nonetheless, Porto Santo presents a specialisation in coastal tourism, mainly concentrated in the summer period. 1.7.3 Main socio-economic trends According to interviewees, tourism demand has changed in the last years. The traditional tourist visiting Madeira usually comes from Northern Europe (UK and Germany), has an advanced age and has high purchasing power and looks for rest in the hotels. Nonetheless, in the last 10 years there has been a gradual reduction in the average age of tourists visiting Madeira and therefore there is change in the requested tourism activities. Nowadays, the connection between nautical sports and recreational maritime activities and tourism is strongly evident in the Archipelago of Madeira and activities such as whale watching, scuba-diving, surf, bodyboard, windsurf, Stand-up Paddle, recreational fishing, underwater archaeology, sailing, visits to Desertas islands, etc. have experienced a steady increase and are the ones with the highest development potential. Indeed, in the last decade, Madeira invested in the construction of supporting infrastructures and dedicated areas have been created in Funchal and in Porto Santo harbours.

(3) Our elaboration on data from INE, Sistema de contas integradas das empresas.

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As a confirmation of the island potentialities and promotion efforts of the last years, Madeira was chosen to receive the sixth act of the Ocean Race of the Extreme Sailing Series that for safety regions moved from Turkey to the Atlantic Ocean waters. This event represents an excellent opportunity to promote Madeira as a destination for nautical tourism and strengthens the international reputation of the region. The entrance of the island in the international circuit of the major sailing competitions and events, is the most important current challenge for the region. It would have a positive impact in the ARM tourism promotion, would stimulate the improvement of infrastructures and would contribute to the regional economy considering its induced impact on local economy. 1.7.4 Preliminary findings on growth potential Tourism has yet enormous potential mainly related to nautical tourism, especially because there are rooms for improving the activity. Currently it is difficult to estimate the economic impact generated by nautical tourism. Furthermore, an increase on the quality of services, diversification of the products and on the degree of attracting foreign tourists, would contribute to the decrease of the seasonality of coastal tourism mainly in Porto Santo. Licensing procedures of maritime tourism activities (i.e. activities that take places on the sea) are burdensome and too many constraints hinder the development of these activities. Furthermore, the sharing of the same infrastructures with other activities hamper the fulfilment of the activities potential. Moreover, there are still constrains such as the lack of qualified staff, mainly in the recreational and nautical tourism and in maritime tourism, since potential personnel which should be dedicated to tourists management are at present involved in other sectors (e.g. fishery).

1.8 Cruise tourism 1.8.1 Overview One of the most relevant maritime activities in the ARM, is the cruise shipping. Madeira is widely involved in large cruise circuits such as:  circuits connecting Madeira and Canary Islands and North Africa;  circuits operating from the Atlantic seaboard of Europe and the Western Mediterranean;  circuits operating from northern Europe, including the UK;  cruise circuits linked to the annual repositioning of cruise ships between North America and Europe. It is an important activity for the local economy as it allows to offset traditional tourism seasonal cycles. Indeed, cruise passengers scales are concentrated between October and April (85 %) The top demand occurs in December, as a result of strong demand driven by tour packages offered by the region for the New Year Celebration. 1.8.2 Geographical distribution Cruise is exclusively concentrated in Funchal. 1.8.3 Main socio-economic trends In terms of reception conditions, the tourist Port of Funchal has been recently re-planned for the cruise passenger traffic and in 2010, the New Maritime Terminal was opened. The Terminal is able to receive up to three cruise ships. Since 2008 the number of cruise passengers has increased by 45 % and the number of cruise ships calling in the Funchal harbour increased by 5 %. The Port of Funchal received until the end of 2016, three inaugural calls until the end of the year from the cruise ships ‘Sea Explorer I’, ‘Koningsdam’ and ‘Seven Seas Explorer’.

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Figure 5 – Evolution of the number of cruise ships calls and passengers in Funchal and Porto Santo harbours Cruise ships calls Passengers

700 000

600 000

500 000

400 000

300 000

200 000

100 000

- 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Source: APRAM, Administração dos Portos da Região Autónoma da Madeira, SA. 1.8.4 Preliminary findings on growth potential Cruise tourism remains an activity with a remarkable growth potential mainly if we consider that, for the moment, it is an activity concentrated from October to April. Indeed, local authorities are working for extending the period of the cruise tourism in the island, also considering the induced impact on local economies. Cruise tourism has a positive impact on local economy because, on one hand, it generates revenue making cruise tourists spending in the region through visits, excursions, souvenirs, restaurants, etc. during their short stay. On the other hand, because it stimulates cruise passengers’ will to come back on vacation, and become themselves agents of promotion of the tourist destination. However, the role that ARM ports can play for developing this activity is strongly conditioned by the strategies of cruise companies and the consequent organisation of their activity at international level, resulting in the definition of the circuits and the choice of the ports (which explains the present seasonality registered in cruise activity in Madeira). However, Madeira has some competitive advantages (e.g. attractiveness of the region, tradition and knowledge of the activity, proximity to other ports and ease of integration into various circuits) that permit to undertake development policies with ship owners and cruise operators that chose call ports and define cruise circuits. In this context, it would be important to enlarge cooperation with Canary Islands, Lisbon and the Azores ports and develop joint initiatives with major ship owners operating in this region, towards the development of new circuits and the repositioning of ships, mainly outside the current peak periods of the cruises. Moreover, vertical integration between cruise ship operations and other business interests could create synergies and open the door for product diversification, for example by emphasising the link between cruise terminal operations and shore-based activities (i.e. shore excursions or cruise port resorts).

1.9 Biotechnology An emerging activity that is expected to be developed in the future is marine biotechnology. The sector’s growth potential is centred on the exploration of genetic resources and the use of marine organisms for bio-products with industrial, pharmaceutical, medical, cosmetic and industrial application. One micro company is investing in the blue biotechnology market, dedicating itself to the production of natural extracts obtained from marine macroalgae. The company promoted, in conjunction with the University of Madeira, the BPMA project – ‘Bioprospecção de Macroalgas Marinhas para Cultivo e uso da Matéria-Prima na Produção

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de Extractos’, funded by the program INTERVIR (4), aimed at bioprospecting and production of seaweeds for the production of natural extracts. The project aimed to contribute to the use and exploitation of marine resources and to promote innovation in industry, particularly in the regional agri-food sector. As a result of BPMA project the company and the University conducted a detailed study on the potential of 12 macroalgae that grow in the Madeira coasts. The project also envisaged the selection of three macroalgae with greater prospective for industrial use and biotechnology development, on the design and development of a set of processed products (i.e. flour for food use) based on macroalgae to be launch on the market after the completion of this project.

1.10 Other activities 1.10.1 The International Shipping Register of Madeira – MAR In 1989, the Madeira International Shipping Register (RINM-MAR) was created with the scope of:  avoid flagging out of ships of national ship owners;  strengthen the attractiveness of Portugal with regard to ship owners and vessels;  contribute to diversify the ARM economy. Since its creation, RINM-MAR has been able to attract an increasing number of ships: in 2015 the number of registered ships reached 239 commercial ships. Figure 6 – Evolution of the number of ships registered in the RINM-MAR (2004-2015)

Source: RINM-MAR According to interviewees, the RINM-MAR could further improve its performance relative to other main international and European ship register by changing/introducing some rules. For example: need to streamline procedures for certification of crews that are at present time consuming and highly bureaucratic compared with other international registrations; currently the commandant and 50 % of crew should be from a European country or Portuguese-speaking. This requirement does not appear in the records of RINM-MAR competitors; etc.

(4) Programa Operacional de Valorização do Potencial Económico e Coesão Territorial da Madeira (Operational programme for the promotion of the economic potential and for the territorial cohesion of Madeira) created within the European Regional Development Fund.

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1.10.2 Biofuel production plant from microalgae In 2006, was launched a pilot project consisting in a biofuel production plant from microalgae in Porto Santo Island. It was a pioneer project aimed at replacing fuel used in the production of electricity in the island by biofuel of marine origin with the intent of making Porto Santo a green island. According to interviewees, the project did not work as envisaged. Indeed, there were problems to use this technology at industrial levels. The plant still exists but it works at micro level. 1.10.3 Observatório Oceânico da Madeira The Oceanic Observatory of Madeira seeks to become a centre of excellence dedicated to research and permanent monitoring of the ocean. This initiative brings together a multidisciplinary scientific community, joining several institutions with the aim of promoting cooperation and resource optimisation. The initiative started in January 2014, aiming to consolidate historical data, observations and forecasts in a common platform, and permitting the Autonomous Region of Madeira to meet the demands of marine resources evaluation and management, providing the region with adequate means for its sustainable development. OOM operation is co-financed by the Madeira Regional Operational Programme (Madeira 14-20), under the Portugal 2020 strategy, through the European Regional Development Fund (ERDF). Anchoring its activities in the existing knowledge and expertise, the projects aims to develop research in Biodiversity; Fisheries and Aquaculture, Remote marine Animal Detection and Remote Sensing, Meteo-Oceanographic modelling and forecasting systems. The project has also some ‘core’ activities which include leadership and management as well as Educational and Outreach activities. Data management and services are also part of the core activities. The Observatory is currently working in a pilot project of wave energy. It is yet at an initial phase. 1.11 Possible impacts of climate change in Madeira (5) Most of infrastructures in Madeira are located on the coast and the increase of sea levels might impact on their use and accessibility. However, more precise assessments should be carried out to this regard, since rising levels of sea could be due to seasonal effects rather than to climate change. The increase of ocean temperature might generate losses of deep-water corals and invasive species might be detected in Madeiran waters. It has been highlighted that the most remarkable effect of climate change in Madeira could be the concentration of precipitations in shorter periods, generating not only the reduction of rainfalls during autumn, winter and spring – and therefore the reduction of water resource available – but also the possible raising occurrence of floods and landslides, especially in summer. On the other hand, a different study highlighted the possibility that the increase of floods and landslides might not be attributable to climate changes, but rather to the effects of human activities. It should be however highlighted that in general a higher human pressure on ecosystems might result in a reduced resilience of Madeira to climate change. Adaptive actions should be undertaken by coastal tourism, in order to increase the resilience against flood, water availability and access to infrastructures (especially for cruise).

(5) European Commission, 2014, The economic impact of climate change and adaptation in the Outermost Regions, http://ec.europa.eu/regional_policy/sources/activity/outermost/doc/impact_climate_change_en.pdf .

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2. Synergies and tensions between maritime activities The table below reports synergies and tensions of each activity with other maritime activities and which are the contribution to sustainable Blue growth Synergies Conflicts Contribution to Group Sector with other maritime with other maritime sustainable growth activities activities Efforts have been made Conservation needs to develop sustainable of marine fisheries and preserve biodiversity, together available biomass. with the growing Geostrategic position demand for natural and management resources and the problems: in terms of creation of marine sustainability, the natural parks, create monitoring and the conflicts with the supervision of the large At present synergies fishing activity that EEZ is crucial. Therefore, between fisheries suffers from lack of sustainable challenges and other maritime biomass. will be the strengthening activities have not of the linkage between Fisheries been developed. Living Infrastructures fisheries and tourism and Synergies could be resources dedicated to fishing sectors. aquaculture strengthened with activities are located Contribution of maritime tourism in small ports and are aquaculture to (e.g. pesca-tourism, limited, and sustainable growth is whale watching, etc.) compromise the currently growing and its and with ship repair. expansion of the potential is very fishing activity and important to ARM causes undesirable presumably in terms of interferences with the GVA and employment movement of freight growth. The sector has and passengers as an important role as it the movement of could largely contribute passengers is to the reduction of the growing. pressure on the fishing stocks. Synergies with coastal tourism in Maritime Porto Santo in order

transport to offset high seasonality of tourism in the island The creation of the The port activity is Funchal Cruise mainly linked to the Terminal in the cruise sector and to Funchal port, is an nautical and maritime added value for the tourism. cruise tourism that is The contribution to a Conflicts in the use of increasingly sustainable Blue Growth maritime space still competitive and could therefore be Shipping Ports exist mainly because demanding. The significant, considering (including nautical tourism and investment program that the most important dredging) recreational tourism undertaken in the Blue activities in the are recording an last decade re- archipelago need exponential growth. planned the entire adequate port harbour infrastructures for infrastructures exploiting their growth leading to a potential. specialisation of the most important ports This activity has No conflicts With the increasing been for a long time identified. Potential nautical and recreational Ship repair linked almost conflicts could activities, has a growth exclusively with emerge in the potential.

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Synergies Conflicts Contribution to Group Sector with other maritime with other maritime sustainable growth activities activities fishing activity. management of ports However, with the areas where different growth of the activities should nautical tourism and share the same recreational tourism areas. is becoming more interesting. There is a wide potential Accommodation offer for the development of and maritime tourism marine protected areas activities are and marine parks As regards nautical concentrated in the together with sustainable tourism, obvious municipality of recreational marine synergies exist with Funchal generating activities ports and, by a high pressure on High population density Coastal lesser extend with coasts. and consequently high tourism ferry passengers The increasing pressure on coasts. The transport (for number of protected impacts of economic and reaching Porto Santo areas and related demography growth during summer restrictions increase (pollution, use of lands, period) the concentration of industrial and household maritime tourism waste, energy activities in Funchal. consumption) are Tourism strongly consistent Vertical integration between cruise ship operations and other business interests Potential conflicts could create could emerge in the synergies and open management of Cruise tourism has a the door for product coastal areas for the growth potential in Porto Cruise diversification for use of spaces, in view Santo Island but tourism example by of development of stopover infrastructures emphasizing the link nautical services and should be improved between cruise other activities terminal operations related to maritime and shore-based tourism activities (i.e. shore excursions or cruise port resorts).

2.1 Synoptic view of legislative, non-legislative and financial synergies and tensions among maritime activities The following table reports a synoptic view of main synergies and tensions grouping them under legislative, non-legislative and financial frames.

Synergies with other maritime activities ACTIVITY LEGISLATIVE NON-LEGISLATIVE FINANCIAL No Fisheries and No synergies No synergies identified synergies aquaculture identified identified  Synergies with coastal tourism in Porto Santo in No Maritime No synergies order to offset high seasonality of tourism in the synergies transport identified island identified  Specialisations Ports  The creation of the Funchal Cruise Terminal in the No of the most (including Funchal port, is an added value for the cruise synergies important dredging) tourism identified ports reduced

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Synergies with other maritime activities ACTIVITY LEGISLATIVE NON-LEGISLATIVE FINANCIAL conflicts among different types of traffic  Potential synergies could emerge with relation to No No synergies Ship repair other activities that could require the support of synergies identified repairing services (fishing, leisure boats, etc.) identified  Synergies exist with ports and, by a lesser extent No Coastal No synergies with ferry passengers transport: the first support synergies tourism identified nautical tourism, the second one support identified movement of tourists among islands  Vertical integration between cruise ship operations and other business interests could create synergies No No synergies and open the door for product diversification for Cruise tourism synergies identified example by emphasizing the link between cruise identified terminal operations and shore-based activities (i.e. shore excursions or cruise port resorts).

Conflicts with other maritime activities ACTIVITY LEGISLATIVE NON-LEGISLATIVE FINANCIAL  Conservation needs of marine biodiversity, together with the growing demand for natural resources and the creation of marine natural parks, create conflicts with the fishing activity that suffers from lack of biomass Fisheries and  Infrastructures dedicated to fishing activities are aquaculture located in small ports and are limited. They compromise the expansion of the fishing activity and causes undesirable interferences with the movement of freight and passengers as the movement of passengers is growing Maritime No conflicts identified transport  Conflicts in the use of maritime space still exist Ports (including mainly because nautical tourism and recreational dredging) tourism are recording an exponential growth  Potential conflicts could emerge in the management Ship repair of ports areas where different activities should share the same areas.  High pressure on coast in the Funchal area, since all accommodation and in general, coastal tourism activities are located. Coastal tourism  Protected areas and related restrictions increase the concentration of maritime tourism activities in Funchal  Cruise is gaining an increasingly important role in the ports traffic in Funchal. Possible conflicts for the Cruise tourism use of spaces with other maritime activities could emerge.

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3. Best practices and flagship projects

1. Name of the project/ practice: Centro de Maricultura da Calheta Objectives: Develop production methods of biological juveniles of Sparus aurata and certification according to EU regulation Results achieved: Still on going. It provides technical support to local producers with training and specialisation courses. It has a nursery of around 400 000 juveniles per cycle, with 3 or 4 cycles per year. It provides support for the sector and is an important basis for fulfilling the potential of aquaculture in Madeira Reasons for considering it as best practice/flagship project: the Centre introduced an important innovation in the archipelago since it provides juveniles for farming activities. Therefore, considering the effective and efficient sustain to local farms, the Centre should also continue in the future. The creation of such a centre is pivotal for developing farming activities and it is transferable and reproducible in other contexts.

2. Name of the project: LIFE Madeira Monk Seal Objectives: Protection of the sites used by the monk seal. Reduce the threat and disturbance caused by fishermen, tourism operators, tourists, and the general population. Results achieved:  Improved protection of terrestrial habitats used by monk seals in the Madeira archipelago.  Improved implementation of regional legislation protecting marine mammals.  Increased intervention capacity for the Madeira Natural Park Service along the entire coast of the island of Madeira and the Desertas Islands in dealing with threatening or emergency situations involving monk seals.  Reduced threats and disturbances to the monk seal by fishermen, tourism operators, and local inhabitants, as well as a reduction in the number of accidents and entanglements involving marine litter.  Development of a permanent protocol for monitoring the conservation status of the monk seal. Reasons for considering it as best practice/flagship project: the project should be considered efficient and effective since it achieved concrete results related to the protection of seals in Madeira and it is innovative, since introduced new practices and rules for protecting marine mammals. Although this practice is focused on specific marine mammals, similar approach could be pursued for protecting endangered species in other contexts. It can therefore be considered as reproducible and transferable.

3. Name of the practice: ‘Produto da Madeira’ brand Objectives: it is a certification system aimed at labelling specific Madeira’s products for increasing the confidence of consumers towards products made in Madeira. Results achieved: more than 200 products have been certified, with more than 4 000 enterprises. More than 6 million of stamps have been sold Reasons for considering it as best practice/flagship project: the practice achieved concrete results, with a wide number of products certified. It is an innovative practice, since it generates added value to local products and it is reproducible in other contexts.

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3.1 Best practices and flagship projects details Other subjects/ Maritime Name of the Programming Leading actor(s) stakeholders Timing sectors Budget project/ practice document involved involved Practice: Centro Centro de Marisland de Maricultura Maricultura da Madeira 2014 Aquaculture unknown PROMAR da Calheta Calheta Aquicultura Lda ARM Government Project: LIFE Parque Nacional On Marine Madeira Monk - unknown Life da Madeira going biodiversity Seal Fundación CBD- Habitat Proactice: All stakeholders Regional On All maritime Produto da which adopted Not available Not available government going sectors Madeira’ brand the brand

4. Gap analysis In this section, each maritime activity has been analysed in order to identify ‘what is missing for a sustainable Blue Growth’ in terms of ‘Human resources skills’, ‘Infrastructures’, ‘Research’ and ‘Data’.

 Fisheries and aquaculture Madeira fishery sector presents an overall low level of education and training of fishermen. They have limited business management skills and does not seek for business opportunities for diversifying their income and developing synergies with others sectors (i.e. maritime tourism). Human An overall lack of knowledge of on-board security measures has been resources identified, especially considering that vessels are small and aged, and skills that fishing operational area has been expanded far from the coast. The low skill-base of the local work force affects the sector knowledge on important issues such as fish stocks and marine biology. Average age of fishermen is high and there is little turnover as marine fishing does not appear to be attractive for young people.

Infrastructures dedicated to fishing activities are located in small ports and are limited. Traditional vessels used are small and aged, and do not ensure Infrastructures appropriate working conditions and security measures on board. Costs of transport between island and continental markets are high, due to the insularity condition and limit the competitiveness of local products on the main markets.

Economic zone under ARM jurisdiction is insufficiently known, especially as regards the ecosystems of the deep sea and possible other species to be exploited, potentially oriented to productive applications that would enhance the economic use of resources. Technological means are Research limited and investigations costs are high. In order to ensure the sustainability of fishery activity and preserve the conservation of resources, the monitoring and the supervision of the large EEZ is crucial.

Long lengths series available on the main sector indicators. No gaps Data identified

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 Maritime Transport

Human Insufficient training of human resources for operational functions. Lack resources of qualified resources in shipping and logistics management and skills operational personnel

Infrastructures Reception infrastructures in Porto Santo need to be developed

Research NA

Data Series on Sea and coastal passenger water transport are incomplete

 Ports Human Lack of human resources qualification in shipping and logistics resources management, as well as in operational functions. See Maritime transport skills

Lack of a competitive network of logistic services linked to the international network and distribution channels, for improving the use of the ports. Spaces in ports areas are not exploited in the most effective way, and conflicts could emerge when new activities need to be settled in port areas. The small dimension of the market, with a limited export capacity and Infrastructures extremely dependent from external market, limits the shipping profitability: freight transport has been decreasing. Difficulty to compete with other ports of the Atlantic area in all segments of the maritime and port business (services related to ships, goods, crews and passengers). Lack of satisfactory conditions for cruise ship stopovers in the port of Porto Santo.

More research should support investments in harbours. In fact, ports and related infrastructures have been built with limited assessments of Research conditions (e.g. tides, sea storms directions, waves directions, main winds, etc.).

Data on Warehousing and storage services not available for 2010; data Data on H 52.22 Service activities incidental to water transportation not available from 2011 to 2014. Data on employment is not realistic

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 Ship repair

Human There is a need for new qualifications in ship repair (training and resources updating courses) skills

The development of the activity would need a more appropriate management of spaces in port areas, for meeting the sector’s requirements Infrastructures are not appropriate for the management of most recent and bigger leisure boats Infrastructures This activity lacks of equipment and materials for duly carrying out the activity (spare parts of vessels and engines). Furthermore, due to the remoteness of the archipelago, time needed for making spare parts available is significant. Subcontracts with spare parts providers are missing

Research No research surveyed

Data Limited availability of data

 Coastal tourism Human In the archipelago, there is an insufficient training of human resources resources mainly concerning nautical and recreational activities. skills

Infrastructures as catalysts for the increasing of the sporting activities and the tourism activities are not enough, for sustaining the development of the sector. Mooring places in marinas are not enough for meeting the demand of ships calling Madeira, especially for larger vessels. Security in marinas is limited and there is an overall lack of Infrastructures spaces dedicated to ship repair activities and dry parking of vessels. The modernization of the accommodation facilities is occurring through construction of new hotels, and not the renewal of the existing ones. The sector is strongly indebted which prevents future reinvestments. ARM has a low rate of certifications (despite the remarkable growth in 2012): main gaps in the ISO 14001 and 9001.

Research NA

Lack of data concerning nautical tourism. Currently it is difficult to Data estimate the economic impact generated by this activity that has an important growth potential

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 Cruise tourism Human resources Not available skills

In the last decade, ports infrastructures were object of an important investment program of modernisation. This investment program re- planned the entire harbour infrastructures leading to a specialisation of Infrastructures the most important ports. A cruise terminal was built and it has a capacity to receive simultaneously three cruise ships. Lack of satisfactory conditions for cruise ship stopovers in the port of Porto Santo.

Research NA

Data Series on Sea and coastal passenger water transport are incomplete

4.1 Synoptic view on the gaps identified The following table reports a synoptic view of main gaps identified grouping them by ‘legislative’, ‘non-legislative’ and ‘financial’ gaps. ACTIVITY LEGISLATIVE NON-LEGISLATIVE FINANCIAL  Limited business management skills and does not seek for business opportunities for diversifying their income  Lack of knowledge of on-board security measures for ensuring the safety of fishermen  Sector knowledge on important issues such as fish stocks and marine biology is missing  Marine fishing does not appear to be attractive for young people  Infrastructures dedicated to In order to ensure the fishing activities are located in sustainability of fishery small ports and are limited. activity and preserve Limited areas are dedicated to Fisheries and the conservation of this activity. aquaculture resources, the  Traditional vessels used are monitoring and the small and aged, and do not supervision of the ensure appropriate working large EEZ is crucial conditions and security measures on board.  Costs of transport between island and continental markets are high, due to the insularity condition and limit the competitiveness of local products on the main markets.  Economic zone under ARM jurisdiction is insufficiently known, especially as regards the ecosystems of the deep sea and possible other species to be exploited  Lack of qualified resources in shipping and logistics Maritime management and operational transport personnel  Reception infrastructures in

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ACTIVITY LEGISLATIVE NON-LEGISLATIVE FINANCIAL Porto Santo are not adequate for meeting passengers flows  Spaces in ports areas are not exploited in the most effective  Lack of satisfactory conditions way, and conflicts Ports for cruise ship stopovers in the could emerge port of Porto Santo. when new activities need to be settled in port areas.  lack of equipment and materials  More appropriate for duly carrying out the activity management of (spare parts of vessels and spaces in port engines). Ship building and areas is needed for  time needed for making spare repair avoiding conflicts parts available is significant. with other  infrastructures in ports are activities limited and do not fully support ship repair activity.  Human resources concerning nautical and recreational  Security in marinas activities are not adequately  Accommodation is limited and there trained for meeting the sector is is an overall lack of increasing sector demand. strongly Coastal tourism spaces dedicated  Mooring places in marinas are indebted which to ship repair not enough for meeting the prevents future activities and dry demand of ships calling Madeira, reinvestments. parking of vessels especially for larger vessels.  ARM has a low rate of quality certifications.  Lack of satisfactory conditions Cruise tourism for cruise ship stopovers in the port of Porto Santo.

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Mapping actors and maritime strategies 5. Mapping public authorities

Maritime sector(s) Name of the authority Main roles and responsibilities Address Website

Governo da Madeira — Direção Regional de Assuntos Europeus e Rua Câmara Pestana, nº 17- Cooperação Externa all European affairs 2º, https://www.madeira.gov.pt/draece (Government of Madeira - 9000-043 Funchal Regional Directorate for European Affairs and External Cooperation) Ensure the implementation of DRET — Direção Regional the policy defined by the Ports, cruising, ferry da Economia e Regional Government for the Rua do Seminário, nº 21 transport, Nautical Transportes (Regional https://www.madeira.gov.pt/dret/ sectors of Commerce, Industry, 9050-022 Funchal sports, air transport Directorate for Economy Energy, Quality, Transport and and Transport) Mobility Ensure implementation of the Edifício da Sociedade Direção Regional de Fishing and policy defined by the Regional Metropolitana de C. de Lobos Pescas (Regional No dedicated website identified aquaculture Government for the fishing and Praça da Autonomia Directorate for Fishery) aquaculture sectors 9300-138 — Câmara de Lobos Ensure implementation of the Direção Regional do policy defined by the Regional Avenida Arriaga, 18 https://www.madeira.gov.pt/sretc/Estrutur Tourism Turismo (Regional Government for the tourism 9004-519 Funchal a/Dire%C3%A7%C3%B5es-Regionais Directorate for Tourism) sector Sea policy: safety, tourism, sport, knowledge and education, research DROTA — Direção and innovation, Regional do Ordenamento Ensure implementation of the protection and Rua Dr. Pestana Júnior 6º, 3º do Território e Ambiente policy defined by the Regional conservation, D https://www.madeira.gov.pt/drota (Regional Directorate for Government for the policy of sustained and 9064-506 Funchal Spatial Planning and the Sea sustainable Environment) exploitation and the respective value of living and non- living resources

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Maritime sector(s) Name of the authority Main roles and responsibilities Address Website

Direção Regional de Calçada de Santa Clara, 38 — All Estatística (Regional Regional Statistics 1º https://estatistica.madeira.gov.pt/ Directorate of Statistics) 9004-545 FUNCHAL Assists in the development of a Centro maricultura da Estrada Comandante marine aquaculture industry in Aquaculture Calheta (Mariculture Camacho de Freitas, 516, No dedicated website identified the Autonomous Region of center of Calheta) 9020-152 Funchal Madeira It is a department of the Estação de Biologia Funchal municipality, dedicated Cais do Carvão http://www.cm- Marine biology Marinha do Funchal to scientific research especially Promenade da Orla Marítima funchal.pt/ciencia/index.php?option=com_c (Marine Biology Station in in the areas of biology and Funchal ontent&view=article&id=222&Itemid=352

Funchal) coastal ecology and deep waters

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6. Summary of existing maritime strategies 6.1 National Ocean Strategy 2013-2020 (NOS) The National Ocean Strategy 2013-2020 (NOS) identifies the areas of intervention that can enable Portugal to face several challenges concerning the promotion, the growth and the competitiveness of the maritime economy. The Mar-Portugal Plan, is an action plan that establishes and promotes the coordination of all areas concerning the oceans. It ensures an economic, social and environmental promotion of the national maritime space through the implementation of sectoral and cross-sectoral projects The NOS 2013-2020 presents a new ocean and coastal areas development model in order to meet the new challenges on promotion, growth and competitiveness of the sea economy. The return of Portugal to the sea depends on the implementation of a strategy based on knowledge and technological progress. The NOS 2013-2020 identifies policy areas and presents an action plan that includes programs with specific objectives The Mar-Portugal Plan above all foresees the economic, social and environmental recovery of the national maritime space through the implementation of sectoral and intersectoral projects. The financial resources include national and Community funds, and other cooperation financial instruments available, mainly the common strategic framework for Structural Funds (European Regional Development Fund, European Social fund and European Maritime and Fisheries Fund). Concerning EMFF it foresees four pillars: Green and intelligent fishing, Green and smart Aquaculture, Sustainable and Inclusive Territorial Development (shared management). Moreover ‘Horizon2020’ is strongly linked with research programs aimed at facing social challenges and promote competitiveness. Moreover, within this program marine and maritime research will be subject of a strategic approach and own mechanisms, aiming to give it the necessary transversality. A financial instrument to support projects concerning the environment and nature conservation, LIFE program, will help to finance environmental actions of NOS 2013-2020. 6.2 National Strategy of research and development for a smart specialisation 2014-2020 Among the Axes of the Strategy stands out Axis 4 — Economy of the Sea, which was organized around five thematic vectors that fit specific topics and areas of innovation and active relationship with public policies:  marine food resources (fisheries and aquaculture)  natural systems and renewable energy resources  ports, logistics, transport, shipbuilding and marine works  deep sea resources  culture, tourism, sports. 6.3 Programa Operacional De Cooperação Territorial Madeira-Açores-Canárias (MAC) 2014-2020 The European Commission approved on June 3, 2015 the new cooperation program Interreg Spain-Portugal MAC (Madeira-Azores-Canarias) 2014-2020 which will have a budget of 130 million euros (85 % funded the European Regional Development Fund- ERDF). Cape Verde, Senegal and Mauritania will also participate to the program, allowing to enlarge the natural area of socioeconomic and cultural influence and increase the possibilities of cooperation. The program specific objectives are: improve scientific and technological capabilities and knowledge; increase transfer and dissemination of technology and cooperation between companies and universities or other research centres in priority sectors; create conditions for the internationalization of companies; improve the ability to react to potential natural

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threats that affect the cooperation area; increase the attractiveness natural areas, especially those of tourist interest; protect and improve the conservation areas natural and biodiversity; consolidate cooperation strategies between actors operating in the eligible area of the Program. The program is design around 5 main axes (axis 6 and 7 concern technical assistance) and axis 4 oriented to preserve and protect the environment and promoting resource efficiency is the one with highest financial resources (it absorbs 28.20 % of ERDF aid). It concerns natural biological, environmental and geographical fragility, the need for intervention in the vast territory of the Natura 2000 network and the intense natural risks that characterize the area of cooperation. 6.4 Transnational Cooperation Programme for the Atlantic Area 2014-2020 The Transnational Cooperation Programme for the Atlantic Area 2014-2020, has been established based on the objectives of the Europe 2020 Strategy and Maritime Strategy for the Atlantic. The Program aims to contribute to these strategies adopting attainable goals, likely to generate results with a positive impact on the territory of the Atlantic Area. The Programme 2014-2020, co-financed by the ERDF for a total amount of EUR 140 013 194 will cover a wider area than the previous program due to the inclusion of the Canary Islands and regions Autonomous Azores and Madeira. The program should support the reduction of barriers to innovation and contribute to the creation of a business context oriented to innovation, by attracting new investments and activities in areas of R & D & I. Another priority is to create more-oriented companies’ knowledge. Finally, the program foresees the promotion of a most competitive economy but at the same time more environmentally friendly and efficient in terms of resources.

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7. Mapping main stakeholders Maritime Name of the stakeholders Main roles and responsibilities Address website sector(s) Edifício Madeira Tecnopolo, Research& Observatório Oceânico da Madeira Research and monitoring of piso 0 http://oom.arditi.pt/ development (Oceanic Observatory of Madeira) the ocean 9020 -105 Funchal Private non-profit association Agência Regional para o that aims to strengthen Desenvolvimento da Investigação collaboration and links Edif. Madeira Tecnopolo, Research& Tecnologia e Inovação de Madeira between its members the Piso 2 http://www.arditi.pt/ development (Regional Agency for the scientific and business Caminho da Penteada Development of Research, community and to promote 9020-105 Funchal Technology and Innovation in support research and Madeira) development http://www.uma.pt/portal/modulos/ci encia_tecnologia/index.php?T=15015 15839&TPESQ=FRM_ESCOLHECENTR O&TPESQANT=FRM_LST_LISTACENT Universidade da Madeira ROS&IDM=PT&IdInstituicao=7929&N Centro de estudos da Macaronésia Research on biotechnology Campus da Penteada PAG=&TORDANT=&CORDANT=&SCR Marine research (University of Madeira and biological resources 9020 Funchal ANT=/portal/modulos/ciencia_tecnolo Macaronesian Studies Center) gia/index.php&NV_MOD=MODCIENCI A_TECNOLOGIA&NV_EAGR=EAGR_C ENTROINFOGERAL&NV_MOD_ANT=& NV_EAGR_ANT=&NV_TAB=&NV_TAB _ANT= APRAM – Administração dos Portos Manage the port Gare Marítima da Madeira da Região Autónoma da Madeira infrastructures in order to http://www.apram.pt/site/index.php/ Ports Pontinha — Porto do Funchal (Administration of the Ports of the ensure access and movement pt/ 9004-518 Funchal Autonomous Region of Madeira) of persons and goods ACIF- Câmara do Comércio e Industria da Madeira (Madeira Chamber of commerce and Rua dos Aranhas, 24-26 All http://www.acif-ccim.pt/ Chamber of Commerce and industry 9000-044 FUNCHAL Industry) Responsible, on behalf of the Regional Government of Shipping and S.D.M — Sociedade de Madeira, for the Rua da Mouraria 9, 1º investment desenvolvimento da MADEIRA http://www.ibc-madeira.com/en/ management, administration 9000-047 Funchal promotion (Madeira development society) and promotion of the International Business Centre

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Maritime Name of the stakeholders Main roles and responsibilities Address website sector(s) of Madeira (IBC) Cooperativa de pesca do arquipélago da Madeira (Fishing Travessa das Torres, 9060 Fishing Producers organisation No dedicated website identified Cooperative of the Madeira Funchal Archipelago) Pq. Empresarial de Ribeira Aqualcuture Aquailha — Aquacultura, Lda. Private company Brava, Lt. 1 No dedicated website identified 9350-000 RIBEIRA BRAVA Caminho do Cais do Porto IlhaPeixe – Sociedade de Peixe da Novo n.º 18 Aquaculture Private company http://ilhapeixe.pt/ Ilha, Lda 9100 – 061 Santa Cruz Sítio das Lajes https://www.google.it/url?sa=t&rct=j &q=&esrc=s&source=web&cd=1&ved AMRAM – Associação de Municípios =0ahUKEwi- da Região Rua da Mouraria 44-46 - Association of municipalities zNuj77PVAhWJWxoKHVJaApQQFggsM (Association of Municipalities of the 9004-508 Funchal AA&url=http%3A%2F%2Fwww.amra Region) m.pt%2F&usg=AFQjCNH68WQ3eBPr gIUkG-sPjxN3K-_BSw

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Mapping Blue Growth and assessing the potential 8. Growth drivers and barriers The following table reports growth drivers and barriers to growth of each maritime activities identified, analysing them in terms of R&D, Access to finance, Infrastructure, Education, training and skills, Public engagement and Local cooperation (6).

Fisheries and aquaculture Drivers to growth Barriers for growth Fisheries: Incomplete knowledge of marine resources, especially Aquaculture: Existence of the ‘Centro deep-water species. Basic de Maricultura’ that, besides, scientific and experimental producing juveniles for the active research is not carried out, which R&D aquaculture companies, is engaged actually would enhance the in several R&D projects for the economic use of resources. development of aquaculture in the For aquaculture, lack of veterinary ARM waters. medicines for different farmed species. Lack of credit to renew vessels. EMFF played an important role for Access to finance Lack of credit by private financial the stability of fisheries. intermediaries. Fisheries: Infrastructures dedicated to fishing activities are located in small ports and are limited. Limited areas are dedicated to this activity. Traditional small and aged vessels, need to be renewed, with poor conditions on board of comfort and work for fishermen.

Ports infrastructures have been Processing industry: lack of sea object of an important investment stocks and regional consumers’ program of modernisation. This preferences for fresh fish are a investment program re-planned the Infrastructure constraint for the processing entire harbour infrastructures leading industry. to ports specialisation in order to

avoid conflicts among maritime Aquaculture & processing activities. industry: High cost of transport between island and continental markets due to the insularity condition (e.g. imported fish feed; exported aquaculture fish). Remoteness and limited internal market conditioning the capacity to integrate global economic chains in product segments requiring scale. Low levels of education and training of fishermen. No skills in Local communities related to the business management and no Education, training and fishing activity provide a strong visions for diversifying their skills social component to the activity. activities. Fishing does not appear to be attractive for young people. Portuguese Strategy for aquaculture Heavy regional administrative Public engagement 2014-2020 intends to stimulate burden for the aquaculture activity sustainable development of (licensing and concession of

(6) i.e. synergies and conflicts at local level with other activities, be they maritime or non-maritime.

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Fisheries and aquaculture Drivers to growth Barriers for growth aquaculture. spaces). Increasing public interest towards At present, according to R&D activities mainly concerning sea legislation, commercial fishing knowledge. vessels are not allowed to undertake tourism activity. Local cooperation could be developed between the fishery sector and The low skill-base of the local nautical activities (whale and dolphin work force affects sector watching, etc.). knowledge on important issues In a Region like Madeira, where such as fish stocks and marine Local cooperation fishing activity is seasonal, synergies biology and ability to respond to could be important as alternative opportunities in developing income generator. synergies with other maritime Synergies with ship repair could be sectors. another driver for growth.

Maritime transport Drivers to growth Barriers for growth R&D Not available Not available Access to finance Not available Not available Ports infrastructures have been object of an important investment program Freight transport: small market, of modernisation. This investment very dependent from the outside Infrastructure program re-planned the entire harbour and limited export capacity, limits infrastructures leading to ports profitability of freight shipping. specialisation in order to avoid conflicts among maritime activities. Insufficient training of human resources for operational functions and shipping and logistics Education, training and management. skills Lack of cooperation between the industry and the education/training system. Passengers transport: subsidy for Madeira Island inhabitants moving to Public engagement Not available Porto Santo Island during the low season months. Passengers transport: Operating conditions and efficiency of the ferry connection with Porto Santo with Local cooperation about 250 000 passenger/year. Not available Synergies between ferry transport and tourism sector in Porto Santo by the creation of travel packages.

Ports Drivers to growth Barriers for growth Lack of studies concerning sea and waves for a more appropriate R&D Not available development planning of ports areas. Difficulties to mobilise financial resources for maintaining and modernise ports infrastructures Access to finance Not available already built in the past programming period; Difficulties to mobilise resources for

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Ports Drivers to growth Barriers for growth the construction of new infrastructures. Infrastructure and mechanical equipments for accessing to the sea (e.g. cranes, berths, etc.) are scarce and poorly maintained. Lack of infrastructure to support nautical and recreation activities. Lack of security in marinas and Ports infrastructures have been object docks, unavailability of docking of an important investment program stations, parking spaces, dry of modernisation. This investment maintenance and support services. Infrastructure program re-planned the entire Lack of appropriate conditions for harbour infrastructures leading to the reception of yachts and ocean ports specialisation in order to avoid yachts over 25 meters. conflicts among maritime activities. Weaknesses in complementary services to nautical and recreational activities, as, for example, provision of repair and maintenance of vessels. Sea storms damaging harbour infrastructures. Insufficient training of human Education, training and resources for operational functions - skills and for shipping and logistics management. Commitments made by the State under the National Strategy for the Sea.

Wish to develop contracts with private Lack of financial capacity to absorb operators for the construction, Public engagement maintenance expenses of the port maintenance and operation of some infrastructures. infrastructure and maritime port facilities in order to enhance modernization and efficiency (i.e. new ports management, e.g. through concessions, greenfield, etc.). Conflicts among maritime activities in harbour areas due to lack of space. Lack of integration of the commercial or industrial port Local cooperation See ‘Public engagement’ above. activity with other activities, particularly those related to recreation and water sports, and with the use of the marinas by the people.

Ship repair Drivers to growth Barriers for growth R&D Not available Not available Access to finance Not available Not available Lack of equipment and materials: limited spare parts and long time is needed for making them available. Infrastructure Not available Limited infrastructures in port for supporting ship repair (tailored to fishing vessels). Education, training and Lack of updated expertise for Not available skills operating in all leisure vessels.

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Ship repair Drivers to growth Barriers for growth Lack of cooperation between the industry and the education and training system. Public engagement Not available Conflicts among maritime activities in It is an activity strongly connected harbour areas due to lack of space. with fishing, nautical and Lack of management of spaces for recreational tourism and maritime the installation and development of Local cooperation transport. There is an important and spaces dedicated to repairing potentially growing demand for this activities or to the movement of activity. ships and boats for repairing purposes.

Coastal tourism Drivers to growth Barriers for growth Existence of the code of conduct of the companies that are dedicated to R&D Not available observation and Cetaceans and Blue Marlin Sport Fishing. Access to finance Not available Not available Accommodation sector is strongly indebted which prevents future reinvestments in existing hotel renewal. Accommodation facilities and related services concentrated in Funchal which limits the development of other areas. Large offer of hotels and other Constraints in terms of space, sea Infrastructure facilities. Construction of new access equipment and infrastructure accommodation facilities. to support nautical and recreational activities (i.e. lack of mooring places). Marinas lack of mooring places, especially for larger vessels, and lack of security and parking dry maintenance spaces and ship repairing services. Lack of certification and qualification of accommodation activities. Insufficient training of human Education, training and resources mainly concerning nautical Existence of an hotel school. skills and recreational activities. Lack of cooperation between the industry and the education and training system. Lack of an integrated marketing tool for promoting coastal tourism in Public authorities are aware of the international market. This tool should Public engagement importance of developing new ways of also serve for coordinating the making tourism in the region. tourism offer and better adapt to the demand. Conflicts among maritime activities Existence of Marine Protected Areas Local cooperation in harbour areas due to lack of with emblematic species. space.

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Cruise tourism Drivers to growth Barriers for growth R&D Not available Not available Access to finance Not available Not available Lack of satisfactory conditions for Construction of the New Maritime Infrastructure cruise ships stopovers in the Porto Terminal in Funchal. Santo harbour. Insufficient training of human resources for operational functions. Education, training Not available Lack of cooperation between the and skills industry and the education and training system. Public authorities pay special Support to promotion campaigns attention to cruise tourism as an Public engagement mainly for New Year Celebration. important target of the regional tourism sector. Existence of strong cooperation with Conflicts among maritime activities other ports in the region (Association Local cooperation in harbour areas due to lack of Cruises in the Atlantic Islands) and space. the Port of Lisbon.

8.1 Synoptic view of legislative, non-legislative and financial growth drivers and barriers The following table reports a synoptic view of main growth drivers and barriers grouping them under legislative, non-legislative and financial frames Growth drivers

ACTIVITY LEGISLATIVE NON-LEGISLATIVE FINANCIAL  Regarding aquaculture, the availability of the Centro de Maricultura’ is pivotal for the development of the sector: it produces juveniles for the active aquaculture companies and it is engaged in several R&D projects for Fisheries and the development of aquaculture in aquaculture the ARM waters.  As regards fishery, an important growth driver is the presence of synergies with other maritime sectors, especially with tourism (for possible diversification of activities) and ship repair.  An important  Operating conditions and efficiency investment of the ferry connections with Porto program re- Santo is a driver for growth for planned the maritime transport related to entire harbour passengers. infrastructures Maritime transport  The existence of synergies between leading to ports ferry transport and tourism sector specialisation in in Porto Santo (by the creation of order to avoid travel packages) is a driver for conflicts among further increasing the demand for maritime ferry services. activities.  Public authorities intend to develop contracts with Ports private operators for the construction,

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Growth drivers

ACTIVITY LEGISLATIVE NON-LEGISLATIVE FINANCIAL maintenance and operation of some infrastructure and maritime port facilities in order to enhance modernization and efficiency (i.e. new ports management, e.g. concessions).  The only driver to growth of this activities is the increasing demand Ship repair of ships calling Madeira, which needs adequate repairing facilities.  Large offer of hotels and other facilities and construction of new accommodation facilities. Coastal tourism  Existence of an hotel school that could support the training of personnel.  Construction of the New Maritime Terminal in Funchal.  Existence of strong cooperation with Cruise tourism other ports in the region (Association Cruises in the Atlantic Islands) and the Port of Lisbon.

Barriers to growth

ACTIVITY LEGISLATIVE NON-LEGISLATIVE FINANCIAL  Fisheries: incomplete knowledge of marine resources, especially deep- water species.  Fisheries: Infrastructures dedicated to fishing activities are located in small ports and are limited. Limited areas are dedicated to this activity.  Heavy regional  Fisheries: Traditional small and administrative burdens aged vessels, that need to be for the aquaculture  Fisheries: lack renewed. activity (licensing and of credit by  Aquaculture: high costs of concession of spaces). private financial Fisheries and transport between island and  At present, according intermediaries. aquaculture continental markets due to the to legislation,  Fisheries: lack insularity condition (e.g. imported commercial fishing of credit to fish feed; exported aquaculture vessels are not allowed renew vessels. fish). to undertake tourism  Fisheries: no skills in business activity. management and no visions for diversifying their activities.  Fisheries: Fishing does not appear to be attractive for young people.  Aquaculture, lack of veterinary medicines for different farmed species.  Freight transport: small market, Maritime very dependent from the outside transport and limited export capacity, limits

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Barriers to growth

ACTIVITY LEGISLATIVE NON-LEGISLATIVE FINANCIAL profitability of freight shipping.  Freight transport: insufficient training of human resources for operational functions and shipping and logistics management.  Lack of cooperation between the industry and the education/training system.  Difficulties to mobilise financial  Infrastructure and mechanical resources for equipment for accessing to the sea maintaining and (e.g. cranes, berths, etc.) are modernise  Lack of studies scarce and poorly maintained. ports concerning sea and  Lack of infrastructure to support infrastructures waves for a more nautical and recreation activities, already built in appropriate especially for yachts over 25 the past development planning meters. programming of ports areas.  Lack of security in marinas and period.  Lack of integration of docks, unavailability of docking  Difficulties to Ports the commercial or stations, parking spaces, dry mobilise industrial port activity maintenance and support services. resources for with other activities,  Weaknesses in complementary the construction particularly those services to nautical and of new related to recreation recreational activities, as, for infrastructures. and water sports, and example, provision of repair and  Lack of financial with the use of the maintenance of vessels. capacity to marinas by the people.  Insufficient training of human absorb resources for operational functions maintenance and for shipping and logistics expenses of the management. port infrastructures.

 Lack of management  Lack of equipment and materials: of spaces for the limited spare parts and long time is installation and needed for making them available. development of spaces  Limited infrastructures in port for Ship repair dedicated to repairing supporting ship repair (tailored to activities or to the fishing vessels). movement of ships and  Lack of cooperation between the boats for repairing industry and the education/training purposes. system.  Accommodation facilities and related services concentrated in Funchal which limits the development of other areas.  As regards nautical tourism, constraints have been surveyed in  Accommodation terms of space, sea access sector is  Conflicts among equipment and infrastructure to strongly Coastal maritime activities in support nautical and recreational indebted which tourism harbour areas due to activities. prevents future lack of space  Marinas lack of mooring places, reinvestments especially for larger vessels, and in existing hotel lack of security and parking dry renewal. maintenance spaces and ship repairing services.  Lack of certification and qualification of accommodation activities.

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Barriers to growth

ACTIVITY LEGISLATIVE NON-LEGISLATIVE FINANCIAL  Insufficient training of human resources mainly concerning nautical and recreational activities.  Lack of cooperation between the industry and the education/training system.  Lack of an integrated marketing tool for promoting coastal tourism in international market. This tool should also serve for coordinating the tourism offer and better adapt to the demand.  Lack of satisfactory conditions for cruise ships stopovers in the Porto  Conflicts among Santo harbour. Cruise maritime activities in  Insufficient training of human tourism harbour areas due to resources for operational functions. lack of space.  Lack of cooperation between the industry and the education/training system.

9. Future potential for mature and pre-developing activities 9.1 Fisheries and aquaculture

 Potential for employment Fisheries is an activity with a great tradition in the ARM contributing largely to the survival of population of fishing villages. With the reduction of the fishing effort, employment has been gradually decreasing. Moreover, the average age of fishermen is quite high and there is little turnover as marine fishing does not appear to be attractive for young people. However, synergies with recreational/nautical tourism activities could stimulate employment in particular for young people. The synergies between fisheries and nautical tourism require appropriate qualifications in business management (for developing a vision in possible diversifications), but also in tourism management, considering that a fisherman should possess basic knowledge on ‘how to deal with tourists’. Regional legislation should be reviewed in order to allow this kind of diversification. Offshore aquaculture is not a labour-intensive activity. However, it has a spillover effect in terms job creation on other sectors: transports, conservation, refrigeration, packaging, both high skilled and low skilled jobs.

 Potential for value added Increased knowledge of fisheries resources can stimulate fishing activity at present characterized by a high seasonality. Fisheries resources not yet explored (small pelagic fish — mackerel, horse mackerel, etc.) could become low cost raw material for processing industry and create value added, but could also be used for non-food use (e.g. aquaculture feeding). Looking at consumption trends, an increase of the internal demand for fishery products and aquaculture is likely to take place in the forthcoming years. Currently there is a growing demand of tourists for sea gastronomic local products. The economic exploitation of shrimp and prawns of Madeira, although with limited stocks, could enrich the regional gastronomic base. Therefore, the connection of the fisheries sector with the HO.RE.CA sector constitutes an opportunity of development, as higher profitability could be achieved shortening the

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supply chain from producers to consumers. This requires investments of modernization and development of the preparation, processing and packaging capacity in the existing processing units, i.e. creation of gourmet products. Secondly, it requires the awareness of hotel facilities and restaurants to offer regular menus based on culinary specialties and the use of lesser value fish in ‘gourmet’ preparations. Moreover, aquaculture has a great potential in terms of GVA. The investments that have been made will boost production (production capacity will pass from 550 tons/year to 1 200 tons a year) and create value. Besides, aquaculture sector has an important role as it could largely contribute to the reduction of the pressure on the fishing stocks.

 Potential for competitiveness Low level of education and training of fishermen: the low skill-base of the local work force affects sector knowledge on important issues such as fish stocks and marine biology and ability to respond to opportunities in developing synergies Availability of human with other maritime sectors. Average age of fishermen is resources adequately high and there is little turnover as marine fishing does not skilled appear to be attractive for young people. The potential in terms of human resources is mainly represented by young people: they could have the capacity – if adequately trained – to ensure the sustainability of the fishery activity, diversifying it and raising its profitability.

Potential for attracting FDI Aquaculture has the potential to attract new FDI.

EMFF, Compensation Plan for Additional Costs of Fish Availability of public funds Products in Madeira.

Traditional small and aged vessels, needing to be Availability of support substituted, with poor conditions on board of comfort and sectors / facilities (e.g. security for fishermen. research, infrastructures, Moreover, there is harbours dedicated to fisheries but fishing etc.) on-land infrastructures are limited and in limited spaces.

In terms of prices of the aquaculture products, ARM suffers from the competition of fish originating from the leading Mediterranean producers. In order to overcome this problem, a partnership was established between the two producer companies for the distribution of fresh and Potential in terms of processed product (fillets, scaled or frozen) with an positioning in the agreement on price (4.5 to 5 € / kg). Moreover, the average international market temperature of the sea water in winter, standing above 17ºC, allows fattening cycles about 2 to 4 months shorter relative to other Atlantic coasts of Europe creating an important competitive advantage that somehow contrasts the transportation costs making aquaculture a profitable activity with a large increasing potential.

9.2 Maritime transport

 Potential for employment Maritime transport has a limited potential for development. Indeed, Madeira is a small market, very dependent from the outside and with limited export capacity, which limits profitability of freight shipping. Freight transport has been suffering from the economic crises and from international competition. Madeira has lost its position of support base and service in the Atlantic, with the exception of cruises shipping. The ferry passenger transport is characterised by the high seasonality of tourism in Porto Santo and thus with a limited growth capacity.

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 Potential for value added Concerning the ferry passenger transport synergies with the tourism sector through the creation of travel packages and the public support give new development prospective to this activity.

 Potential for competitiveness The cost optimisation of shipping routes limits the competitive advantages of small ports in terms of freight and services. Moreover, the reduced volumes of traffic from the islands of Madeira to the mainland (limited export capacity), make the ships carrying a large number of empty containers (for repositioning) which has consequences in the economic profitability of maritime transport. Availability of human The personnel currently in force is adequately skilled but resources adequately training of human resources for operational functions is skilled insufficient.

Potential for attracting FDI N/A

Availability of public funds EU funds.

Ports infrastructures have been object of an important Availability of support investment program of modernisation. This investment sectors / facilities (e.g. program re-planned the entire harbour infrastructures research, infrastructures, leading to ports specialisation in order to avoid conflicts etc.) among maritime activities.

The cost optimisation of shipping routes limits the competitive advantages of small ports in terms of freight Potential in terms of and services. Moreover, the reduced volumes of traffic from positioning in the the islands of Madeira to the mainland (limited export international market capacity), make the ships carrying a large number of empty containers (for repositioning) which has consequences in the economic profitability of maritime transport.

9.3 Ports

 Potential for employment The potential for port development still exists even if significant steps forward have been done with the harbour investment program undertaken during the last decade. Although harbour infrastructures have been reorganised and modernised, the growth of the recreational and nautical activities still require new infrastructures and support services such as for example ship repair, more mooring places and dedicated areas. These new activities should have a positive impact on employment mainly stable low skilled jobs.

 Potential for value added Future growth of this activity could pass through the development of contracts with private operators for the construction, maintenance and operation of some infrastructure and maritime port facilities, which can enhance modernization and management efficiency.

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 Potential for competitiveness Availability of human Diversification of ports activities, i.e. nautical activities, resources adequately skilled will required qualified personnel.

Potential for attracting FDI Not identified.

Ports infrastructures have been object of an important Availability of public funds investment program of modernisation. Lack of funds to maintain infrastructures.

Ports infrastructures have been object of an important Availability of support sectors investment program of modernisation. This investment / facilities (e.g. research, program re-planned the entire harbour infrastructures infrastructures, etc.) leading to ports specialisation in order to avoid conflicts among maritime activities.

The adaptation of the infrastructure to new demand requirements, particularly concerning services related to Potential in terms of tourism and nautical tourism would increase ports positioning in the competitiveness. The lack of mooring places rental is international market negative to the Island considering that ARM has a strategic position in the Atlantic area as a crossroads of the Atlantic Ocean routes.

9.4 Ship repair

 Potential for employment The progressive increase of Madeira leisure boats traffic would need adequate facilities to respond to all requests that this type of tourism could generate. In this context, ship repair is an important activity that has a potential in terms of employment, as new shipyards would require new workforce. On the other hand, qualified personnel needs to be trained.

 Potential for value added The development of shipyards specialised in leisure boats repair could generate benefits to nautical tourism, contributing to feed new leisure boats calls cruising the Atlantic. On the other hand, supplies of equipment and material, as well as the availability of spaces for the management of ships should be ensured for the development of the sector.

 Potential for competitiveness Availability of human Not available. Ship-repairing qualifications are not well resources adequately skilled developed.

There is a potential of attracting FDI, if leisure boats’ flows Potential for attracting FDI keep on increasing and if better investments conditions are ensured (e.g. management of spaces in port areas).

Availability of public funds Not available.

Availability of support sectors Infrastructures available do not duly support the / facilities (e.g. research, development of the sector. infrastructures, etc.)

The positioning of ship repair in international market is Potential in terms of linked to the development of leisure boats flows calling positioning in the Madeira. The inclusion of Madeira in the Ocean Race of the international market Extreme Sailing Series could generate benefits to the sector.

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9.5 Coastal tourism

 Potential for employment Even if tourism has a centenary tradition in Madeira, this activity has still a growth potential. Tourism demand and tourists profile have changed in the last years and the demand for recreational and nautical tourism is encountering an exponential growth. This new tourism dimension plays a significant role as a source of employment and value added, with a considerable induced impact in other activities and a spillover effect on other sectors. The development of recreational and nautical tourism demands for qualified staff such as: boats pilots, biologist, boat operators, teachers, whale and dolphins watching operators, tourist guides, naturalistic guides, etc.

 Potential for value added Scientific and nature tourism could be further developed. Value added could be created through skills development to support the implementation of a modern nature and scientific tourism in the vast marine area of the region. The opportunities in this area, with a significant role in the diversification of the tourism products of the ARM, comprise the wildlife viewing (visits to protected areas of the coast and to the Selvagens islands, ‘birdwatching’, ‘whalewatching’, etc.), diving. Other emergent and innovative activities with strong growth potential that are being developed in the region such as ‘coasteering’ and other activities could be further diversified such as diving. A brand could be created to promote recreational and nautical tourism, but more in general to coordinate the local offer and improve its positioning in international market. The inclusion of Madeira in the Ocean Race of the Extreme Sailing Series could also generate important benefits to coastal and nautical tourism, as Madeira could become one of the most important sailing destinations in the world. There is a vast potential for the development of marine protected areas and marine parks together with sustainable recreational marine activities.

 Potential for competitiveness There is a long experience in this sector and there is a Hotel Availability of human school qualifying personnel. However, new skills and resources adequately qualifications are required by the new forms of recreational skilled activities.

Nautical sports and tourism have the potential to attract new Potential for attracting FDI FDI.

Availability of public funds N/A

Ports infrastructures have been object of an important Availability of support investment program of modernisation. However, there is a sectors / facilities (e.g. lack of mooring places and dedicated areas in the harbours research, infrastructures, for recreational and nautical activities. etc.) Accommodation facilities are, however, old and obsolete and are requiring modernisation.

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Madeira has a surprisingly mild weather, with moderate humidity and pleasant average temperatures of 25ºC in the summer and 17ºC in the winter. The sea temperature is also very mild, thanks to the influence of the warm Gulf Stream, averaging 22ºC in the summer and 18ºC in the winter. These Potential in terms of natural conditions create a competitive advantage respect to positioning in the other European destinations and allow doing recreation and international market nautical tourism all over the year. However, a specific promotion tool for the marketing of products and services linked the maritime tourism activities, tourist entertainment activities, water sports and infrastructure to support recreational boating would be appropriated to the development of these activities.

9.6 Cruise tourism

 Potential for employment Madeira Archipelago benefits from an advantageous geographic position, at the crossroads of major cruise flows. This enabled the development of specialised infrastructures, activities, services and ‘know-how’ that could be further exploited creating new employment.

 Potential for value added Vertical integration between cruise ship operations and other blue activities could generate benefits for the local economies, contributing to create new activities and increase the profitability of the existing ones (e.g. fishing vessels could be used for excursions, pesca-tourism, whale watching, etc.).

 Potential for competitiveness Madeira has some competitive advantages (e.g. attractiveness of the region, tradition and knowledge of the activity, proximity to other ports and ease of integration into various circuits) that permit to envisage development policies with ship owners and cruise operators. In this context, it would be important to enlarge cooperation with Canary Islands, Lisbon and the Azores ports and develop joint initiatives with major ship owners operating in this region, towards the development of new circuits, mainly outside the current peak period of the cruises. There is a long experience in this sector. However there is Availability of human insufficient training of human resources for operational resources adequately skilled functions.

Potential for attracting FDI N/A

Ports infrastructures have been object of an important Availability of public funds investment program of modernisation financed with EU funds.

Availability of support sectors A modern cruise Terminal has been created in Funchal. In / facilities (e.g. research, Porto Santo, however, facilities yet need to be developed infrastructures, etc.) and modernised.

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Madeira has some competitive advantages (e.g. attractiveness of the region, tradition and knowledge of the activity, proximity to other ports and ease of integration into various circuits) that permit to envisage development Potential in terms of policies with ship owners and cruise operators. In this positioning in the context, it would be important to enlarge cooperation with international market Canary Islands, Lisbon and the Azores ports and develop joint initiatives with major ship owners operating in this region, towards the development of new circuits, mainly outside the current peak period of the cruises.

9.1 Synoptic view of the future potential by activity The following table reports a synoptic view of main future potential for each activity grouping them by potential for ‘employment’, ‘value added’ and ‘competitiveness’. Potential for Activity Potential for employment Potential for value added competitiveness  Increased knowledge of fisheries resources can  The competitiveness of stimulate fishing activity at the sector could be present characterized by a high achieved only through the seasonality. diversification of the  Fisheries resources not yet sector and the inclusion of  Fisheries: it requires explored (small pelagic fish — young people in the appropriate qualifications mackerel, horse mackerel, ...) sector. in business and tourism could become low cost raw  Specifically, about management for allowing material for processing aquaculture, partnerships vessels owners or new industry and could also be should be established resources to diversify the used for non-food use (e.g. between farming activity. Regional aquaculture feeding). companies in Madeira and legislation should be  The economic exploitation of distribution channels for Fisheries reviewed in order to allow shrimp and prawns of Madeira, ensuring sales of products and this kind of diversification. although with limited stocks, on a longer time through aquaculture could enrich the regional sales contracts.  Aquaculture: it has a spill gastronomic base.  Aquaculture has a over effect in terms job  The connection of the fisheries potential in terms of creation on other sectors: sector with the HO.RE.CA competitiveness that transports, conservation, sector constitutes an could absorb transport refrigeration, packaging, opportunity of development. costs needed to bring the both high skilled and low  Development of the production in continental skilled jobs. preparation, processing and Europe. This potential is packaging capacity in the represented by the time existing processing units. needed for fattening fish  Synergies with HORECA should (about 2 to 4 months be sought for offering regular shorter compared to other menus based on culinary Atlantic coasts of Europe). specialties.

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Potential for Activity Potential for employment Potential for value added competitiveness Limited potential, linked to Limited potential, linked to the Limited potential, linked to the possible development of possible development of the possible development of Maritime passenger ferry transport passenger ferry transport passenger ferry transport transport between Porto Santo and between Porto Santo and between Porto Santo and Madeira. Madeira. Madeira.  The adaptation of the infrastructure to new demand requirements, Value added could be created by The growth of the particularly concerning developing of contracts with recreational and nautical services related to private operators for the activities still requires new tourism and nautical construction, maintenance and Ports infrastructures and support tourism would increase operation of some infrastructure services such as for example ports competitiveness. and maritime port facilities, ship repair, more mooring  Competitiveness of the which can enhance modernization places and dedicated areas. ports in Madeira could and management efficiency. increase by exploring a possible change in the management system.  There is a potential of attracting FDI, if leisure The potential of the sector is boats flows keep on linked to the development of increasing and if better nautical tourism. On the other investments conditions The potential for hand, supplies of equipment and are ensured (e.g. employment is linked to the Ship repair material, as well as the management of spaces in creation of new availability of spaces for the port areas). specialisations able to meet. management of ships should be  The inclusion of Madeira ensured for the development of in the Ocean Race of the the sector. Extreme Sailing Series could generate benefits to the sector.  There is a hotel school for qualifying personnel,  A brand could be created to  New skills and promote recreational and qualifications nautical tourism, but more in  are required by the new general to coordinate the local forms of recreational offer and improve its activities. positioning in international  Regarding nautical The development of the market. tourism, the increasing sector is linked to  The inclusion of Madeira in the flows of leisure boats recreational and nautical Ocean Race of the Extreme could be endangered by tourism. Both activities Sailing Series could also the lack of mooring places Coastal require qualified staff such generate important benefits to and dedicated areas in the tourism as: boats pilots, biologist, coastal and nautical tourism, harbours for recreational boat operators, teachers, as Madeira could become one and nautical activities. whale and dolphins watching of the most important sailing  Accommodation facilities operators, tourist guides, destinations in the world. are old and obsolete and naturalistic guides, etc.  Value added could be created are requiring by exploring new tourism modernisation linked to the nature and  Natural conditions create related recreational activities a competitive advantage (protected areas, visits to respect to other European Selvagens islands, whale/bird destinations and allow watching, coasteering, diving. doing recreation and nautical tourism all over the year.  Madeira has competitive advantages (e.g. Cruise Potential for employment and value added derives from attractiveness of the tourism activities that could be developed on land for cruisers. region, tradition and knowledge of the activity, proximity to

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Potential for Activity Potential for employment Potential for value added competitiveness other ports and ease of integration into various circuits) that permit to envisage development policies with ship owners and cruise operators  It would be important to enlarge cooperation with Canary Islands, Lisbon and the Azores ports and develop joint initiatives with major ship owners operating in this region, towards the development of new circuits, mainly outside the current peak period of the cruises. 10. Investments opportunities Some possible investments opportunities for the maritime sectors mapped:  Fishing vessels aged more than 20 years need to be substituted considering that fishing is carried out the very deep waters and in the Atlantic Ocean. This would enhance work and safety conditions of fishermen.  Construction of new mooring places. Moreover, appropriate conditions should be created for the reception of yachts and ocean yachts over 25 meters.  Ports infrastructures require to be expanded in particular to cope with recreational and nautical tourism activities increasing demand.  Creation of a specialised tool for the promotion and trade of products and services linked to the sea such as the maritime tourism activities, tourist entertainment activities, water sports and infrastructure to support recreational boating, natural and cultural heritage, cultural facilities, etc.  Study on marine renewable energy technologies (wave energy and offshore wind energy).

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Identifying public and private intervention 11. Potential financial, legislative and non-legislative measures for stimulating growth Figure 7 — Logical diagram for fishery and aquaculture

Fishery and Objectives of the strategies/plan/ Strategies/plan/ aquaculture EMERGING NEEDS programme programme

* Need for larger fishing inland infrastructures areas. * Need to substitute vessels, aged and with poor conditions on board of comfort - Promote competitive, sustainable, Infrastructures and work for fishermen. efficient, innovative and knowledge-based * High cost of transport between island and continental markets due to the fisheries; insularity condition (e.g. imported fish feed for aquaculture; exported aquaculture - Promote competitive, sustainable and fish). efficient aquaculture ; Operational Programme MAR * Remoteness and limited internal market condition the capacity to integrate global - Encourage scientific knowledge and data 2020 (FEMP+POSEICAN) economic chains in product segments requiring scale. collection management National level - Increasing employment and territorial - Promote marketing and processing by * need for a better knowledge of marine resources and need to increase scientific improving the organization of the market of Research and experimental research, oriented to productive applications that would enhance the fishery and aquaculture products the economic use of resources. Technological means are limited and investigations costs are high. - Strengthening research, technological * Need for research in aquaculture in particular for diversification of production development and innovation - Reinforcing the competitiveness of SMEs - Protect the environment and promote resource efficiency Education and * need for specialised education and training of fishermen considering issues such RAM Operational Programme OR - Promoting employment and supporting training as fish stocks and marine biology and ability to respond to opportunities in level developing synergies with other maritime sectors. labor mobility * need of skilled labour force in aquaculture - Promoting social inclusion and combating poverty Investment in skills, education and lifelong learning * No funding possibilities for substitution of vessels access to finance * Lack of credit by private financial intermediaries Marine Food Resources (Fisheries and Aquaculture) National Strategy of research and Natural Systems and Renewable Energy cooperation with development for an smart * Need to increase cooperation with Azores and Canary Island concerning research Resources neighbours specialisation 2014-2020 and sea knowledge Ports, Logistics, Transport, Shipbuilding and National level * Need to increase cooperation with other maritime activities (i.e. diversification) Marine Works Deep Sea resources

- improve scientific and technological capabilities and knowledge - increase transfer and dissemination of technology and cooperation between companies and universities or other research centers in priority sectors; Programa Operacional De - create conditions for the Cooperação Territorial Madeira- internationalization of companies; Açores-Canárias (MAC) 2014-2020 - protect and improve the conservation OR level natural areas, especially those of tourist interest; - protect and improve the conservation areas natural and biodiversity; - consolidate cooperation strategies

- reduction of barriers to innovation - createion of companies knowledge more Transnational Cooperation oriented. Programme for the Atlantic Area Promotion of a most competitive economy 2014-2020 but more environmentally friendly and Atlantic level efficient in terms of resources.

In terms of infrastructures, the National Plan could address the need of modernizing fishing ports, auction markets and landing sites and of compensating major costs due to insularity (Compensation Plan for Additional Costs of Fish Products in Azores). However, according to interviewees, there are no financial resources available for the substitution of vessels, which is the main need of the sector currently, considering that vessels are aged and not adequate for ensuring safety conditions to fishermen. It is worth to mention that both the MAR and the OP Programmes could address the need of commercial valorisation of fish and gastronomic valorisation of fish products. In terms of Research the MAR program, the Regional Operational Program and the MAC program duly address the needs that emerged for fishing and aquaculture. The OP ARM 2014-2020 also intends to support integration between activities, mainly fishing/processing industry and tourism. Concerning education and training the Operational Programme should address the needs of the sector.

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Figure 8 — Logical diagram for maritime transport

Maritime Objectives of the strategies/plan/ Strategies/plan/ transport EMERGING NEEDS programme programme

* Need to develop support services linked to ships, to freight, to crews and to - Promote competitive, sustainable, Infrastructures passengers efficient, innovative and knowledge-based * Need to develop reception infrastructures in Porto Santo fisheries; - Promote competitive, sustainable and efficient aquaculture ; Operational Programme MAR - Encourage scientific knowledge and data 2020 (FEMP+POSEICAN) * Need for a specialised training of human resources for operational functions and collection management National level Education and - Increasing employment and territorial training for shipping and logistics management - Promote marketing and processing by improving the organization of the market of the fishery and aquaculture products access to finance * facilitation to access to finance is needed - Strengthening research, technological development and innovation Data Collection - Reinforcing the competitiveness of SMEs systems * Need to develop data collection systems - Protect the environment and promote ARM Operational Programme OR resource efficiency level - Promoting employment and supporting labor mobility - Promoting social inclusion and combating poverty Investment in skills, education and lifelong learning

Marine Food Resources (Fisheries and Aquaculture) Natural Systems and Renewable Energy National Strategy of research and Resources development for an smart Ports, Logistics, Transport, Shipbuilding and specialisation 2014-2020 Marine Works National level Deep Sea resources Culture, Tourism, Sports

In terms of infrastructures, the ARM Operational programme only mentions that investments will be made to improve road accessibility to port areas. On the other hand, no specific measures are envisaged for improving infrastructures in Porto Santo for ferry transport, and in general, no measures have been identified that allow to better manage port areas for improving synergies among activities. Th port specialization strategy adopted in Madeira has brought benefits to the transport sector. Concerning training the ARM Operational programme foresees interventions that could be used to address the needs of the sector.

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Figure 9 — Logical diagram for ports

PORTS Objectives of the strategies/plan/ Strategies/plan/ EMERGING NEEDS programme programme

- Promote competitive, sustainable, Infrastructures * Need of studies concerning sea waves, tides, storms etc. for better developing efficient, innovative and knowledge-based ports and related infrastructures fisheries; * Need of infrastructures to support nautical and recreational activities - Promote competitive, sustainable and Operational Programme MAR (infrastructure and mechanical equipment, availability of docking stations, parking efficient aquaculture ; 2020 (FEMP+POSEICAN) spaces, dry maintenance and support services). - Encourage scientific knowledge and data National level * Lack of appropriate conditions for the reception of yachts and ocean yachts over collection management 25 meters. - Increasing employment and territorial * Need of complementary services to nautical and recreational activities, as for - Promote marketing and processing by example, provision of repair and maintenance of vessels. improving the organization of the market of the fishery and aquaculture products

- Strengthening research, technological Research * Need for more research supporting investments in harbours (e.g. positioning in development and innovation order to be protected from sea storms). - Reinforcing the competitiveness of SMEs - Protect the environment and promote ARM Operational Programme OR resource efficiency level Education and * Need for a specialied training of human resources for operational functions and - Promoting employment and supporting training for shipping and logistics management labor mobility - Promoting social inclusion and combating poverty Investment in skills, education and lifelong access to finance * Difficulties to mobilise financial resources for investments in construction, learning modernisation and maintenance of port infrastructures

Marine Food Resources (Fisheries and Data Collection * Need to develop data collection systems Aquaculture) National Strategy of research and Natural Systems and Renewable Energy development for an smart Resources specialisation 2014-2020 Ports, Logistics, Transport, Shipbuilding and National level Marine Works Deep Sea resources

In terms of infrastructures, the MAR programme addresses the needs emerged for the Port activity in particular concerning the improvement of operational conditions of harbours, logistic and reordering the Funchal Port creating conditions for the reception of big yachts, improve sea accessibility and improve conditions for the reception of boats. As for research, the MAC programme addresses the need for a more accurate knowledge of non-climate-related natural hazards and risks related to human activities (such as technological accidents). Concerning education and training the Operational Programme should address the needs of the sector of training operational staff and resources experts in shipping and logistics management.

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Figure 10 — Logical diagram for ship repair

SHIP REPAIR Objectives of the strategies/plan/ Strategies/plan/ EMERGING NEEDS programme programme

- Promote competitive, sustainable, Infrastructures * Lack of spaces and iinfrastructures for the managemet of ships in port area efficient, innovative and knowledge-based * Lack of equipment and material for (i.e. spare parts) for reparing all types of fisheries; leisure vessels - Promote competitive, sustainable and Operational Programme MAR efficient aquaculture ; 2020 (FEMP+POSEICAN) - Encourage scientific knowledge and data National level collection management - Increasing employment and territorial Education and * Need for a specialied training of human resources for managing all types of - Promote marketing and processing by training repairs in all types of leisure boats improving the organization of the market of the fishery and aquaculture products

- Strengthening research, technological development and innovation * Lack of mechanism for accessing to loans for investing in shipyars access to finance - Reinforcing the competitiveness of SMEs - Protect the environment and promote ARM Operational Programme OR resource efficiency level - Promoting employment and supporting labor mobility - Promoting social inclusion and combating Data Collection * Need to develop data collection systems poverty Investment in skills, education and lifelong learning

Marine Food Resources (Fisheries and Aquaculture) National Strategy of research and Natural Systems and Renewable Energy development for an smart Resources specialisation 2014-2020 Ports, Logistics, Transport, Shipbuilding and National level Marine Works Deep Sea resources

- reduction of barriers to innovation - creation of companies knowledge more Transnational Cooperation oriented. Programme for the Atlantic Area - promotion of a most competitive economy 2014-2020 but more environmentally friendly and Atlantic level efficient in terms of resources. Among different needs identified for ship repair, the lack of qualified personnel for developing a complete range of services to leisure boat is covered by the ARM Operational Programme. All other needs identified are not addressed. Always keeping in mind the importance of the sector for ensuring the growth of coastal and nautical tourism, actually there is a lack of entrepreneurial availability to invest in this activity. The awareness of the importance of ship repair is acknowledged in the public sector, but marginal measures are envisaged for developing it and for ensuring useful business ground for starting new businesses. Mechanisms for accessing to finance (e.g. providing bank guarantees) and for training young people to this sector are indeed two key measures to be undertaken for developing the activity. Considering the remarkable role that the activity can offer to the increasing flows of ships calling Madeira, a structural development policy of the sector has not been surveyed. The integration of ship repair in a holistic development of coastal tourism and ports infrastructures would allow to create better synergies between these sectors, with common infrastructures and better management of spaces. The activity however needs to be boosted and made more attractive for new investments, considering that it resulted to be declining in the recent years.

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Figure 11 — Logical diagram for coastal tourism

The lack of infrastructures and related services for nautical and recreational activities are currently an important issue. In terms of infrastructures, the MAR programme partially addresses these needs in particular the programme could create conditions for the reception of big yachts, improve sea accessibility and improve conditions for the reception of boats. Moreover, the OP for the Atlantic Area responds to the needs to support the development of nautical activities as well as the organisation of a specific offer for oceanic yachts and sailboats and intends to promote the attractiveness of the region for international nautical events. The need to upgrade and modernise accommodation offer does not seem to be addressed by the plans in force. Concerning education and training, the Operational Programme should address the needs of the sector. There is an increasing need for specialisation and life-long training in the sector. New activities such as nautical and recreational activities require specific skills that are not locally available. In terms of cooperation with neighbours, the OP for the Atlantic Area addresses the needs emerged mainly concerning the tourism promotion of coastal fishing and the creation of a promotional portal. The need for data on nautical and recreational activities is not addressed by any plan.

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Figure 12 — Logical diagram for cruise tourism

Ports infrastructures have been object of an important investment program of modernisation financed with EU funds. A modern cruise Terminal has been created in Funchal. In Porto Santo, however, facilities yet need to be developed and modernised. However, the EU funds of the programming period 2014-2020 do not envisage actions in this area. The MAC program addresses the need of cooperation with Canary Islands, Madeira and the Azores ports.

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12. ORs potential contribution to IMP and BG initiatives

All ARM maritime activities contribute to Blue Growth and in particular to the development of maritime, coastal and cruise tourism and aquaculture. Blue energy, Blue biotechnology and marine mineral resources are only marginally covered. Most of maritime activities contribute to marine knowledge. In particular, the maritime activities contribute to support private industry competing in the global economy but also

Realising the potential of the Outermost Regions for sustainable blue growth ANNEX 8 TO THE FINAL REPORT — THE BLUE ECONOMY IN MADEIRA

to improving the quality of public decision-making, to strengthen marine scientific research, to increase competition and innovation amongst users of marine data and to reduce uncertainty in knowledge of the oceans and the seas. Indeed, most of the ARM activities are related to international markets (the internal market is very limited) such as coastal tourism, cruise tourism, maritime transport fisheries and aquaculture. Fisheries, aquaculture, coastal tourism are the maritime activities contributing to strengthening marine scientific research and to reduce uncertainty in knowledge of the oceans and the seas. Maritime tourism activities are concentrated in the municipality of Funchal generating high pressure on coasts. Moreover, the increasing number of protected areas and related restrictions increase the concentration of maritime tourism activities in Funchal. For these reasons, the maritime activities in ARM contribute to maritime planning mainly in relation to the coordination between administrations, the reduction of conflicts between sectors, the protection of the environment. The management of fish resources, the international transport and the cruise tourism contribute to increase cross-border cooperation. The ports maritime activity contributes to the awareness, surveillance and information sharing for enhanced decision-making through the development of environmental monitoring and maritime security in the ARM ports.

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13. Conclusions on concrete measures by type and timeframe By analysing the Logical diagrams above, and considering all findings reported in the previous sections of the report, the following ‘legislative’, ‘non-legislative’ and ‘financial’ conclusions emerged. For each of them, the following details are provided:  possible time frame for fulfilling the potential (short/medium term or long term);  stakeholders that should activate the measure  possible best practices experimented in other territories (i.e. cross-fertilisation possibilities);  measures for achieving/implementing them.

 Fishery and aquaculture Stakeholders that Possible best Conclusion Time frame should activate the practice/flagship Measures for achieving them

measure project Azores has introduced an ‘accelerated licensing procedure’ Local administration should re-

Aquaculture: the analysis put into evidence for installing plants examine the procedure for licensing that administrative procedure for new farming and making them and for allocating spaces for farming activities is heavy and difficult to get. operational. The Short to medium activities. This action should result For this reason, licensing procedure and Local administration practice is still too term from a preliminary analysis of concession of spaces should be de- recent for assessing procedure and identification of regulated, facilitating and supporting the impact on the LEGISLATIVE bottlenecks that currently slow investments in aquaculture sector, but however, down the release of concessions. it could be a source of inspiration for lighten licensing procedure

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Stakeholders that Possible best Conclusion Time frame should activate the practice/flagship Measures for achieving them

measure project In Azores, the diversification of fishing activities by The introduction of rules for employing vessels licensing fishing vessels in tourism for tourism purpose activities is the first step to be has generated good undertaken. Obviously, fishing results, considering vessels should respond to specific Fishery: at present commercial fishing vessels the increasing security requirements for being are not allowed to undertake tourism activity. number of vessels Short to medium licensed and hosting tourists on This limit should be overcome by Local administration requesting tourism term board. This means that a introducing specific rules for licencing licences. preliminary check on vessels maritime tourism Pesca-tourism in applying for this purpose should be Azores has reached done, considering that most of a good development vessels in Madeira are more than 20 level and years old and are small vessels with contributed no security on board. therefore to create additional income to fishermen. Fishery: most of the vessels are more than 20 Local administration, years old and presents constant safety  Inventorying of the fleet envisaging the problems for the crews. Since the fleet currently needing renewal; Short to medium involvement of EU and renewal is not encompassed by the CFP Not available  Launch of the consultation for term national administration, regulation, a public-private consultation exploring possible synergies for as well as all related should be launched for exploring the funding/sustaining the renewal stakeholders possibility of funding fleet renewal

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Stakeholders that Possible best Conclusion Time frame should activate the practice/flagship Measures for achieving them

measure project Fishery: better knowledge of the resources is needed for monitoring the sustainability of resources currently fished. Furthermore, the exploitation of new species should be investigated for reducing fishing seasonality and the pressure on A research centre for monitoring the traditional species. Possible new species could exploitation of resources and for be: exploring new species should be  Deep-water species, whose commercial Long-term action Local administration Not available created. These research functions potential has not been explored yet; could be integrated in the ‘Centro  small pelagic fish — mackerel, horse de Maricultura’ in Calheta mackerel, which could be used for feeding farming plants or to supply

LEGISLATIVE processing industry -  shrimp and prawns of Madeira, although

NON with limited stocks, could enrich the regional gastronomic base Fishery and aquaculture: shortening supply  Creation of a ‘round table’ for chain, offering Madeira products in allowing the meeting of the offer HO.RE.CA sector. This could be an and the demand of fishery Short to medium Fishermen, farmers, opportunity for increasing fishermen/farmers Not available products; term action HORECA sector earnings, and the HORECA sector could also  Creation/identification of benefit from higher quality products and new culinary specialities to be local culinary specialties fostered in HO.RE.CA.

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Stakeholders that Possible best Conclusion Time frame should activate the practice/flagship Measures for achieving them

measure project Aquaculture: strengthening promotional activities for attracting FDI in the sector. Possible elements to be used for attracting investments are:  the favourable natural/climatic conditions, that allows to reducing the fattening time;  The favourable natural conditions could Specific promotional campaigns cover additional costs for transporting should be launched using products to the mainland; international communication  Possibility to use compensations fuds for channels and/or participating to covering competitiveness gaps with Short to medium events. products in the mainland; Pubic authorities Not available term action The developing of non-food use  Existence of the ‘Centro de Maricultura’ in industry (for producing fish meal) Calheta that could support the sector with should be explored and supported. juveniles and other types of support; However, licensing and concession  Fish feed could be produced in Madeira procedures should be lightened. exploring the caught of species with low value;  Specific agreements with distribution channels should be explored, since big companies could have the willingness to look upstream integrations in the supply chain

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Stakeholders that Possible best Conclusion Time frame should activate the practice/flagship Measures for achieving them

measure project As emerged in all steps of the analysis, training and specialisation courses  Creation of a training centre. should be undertaken for fishermen and The widening of activity of the young people for: Centro da Maricultura should  Improving business management skills be explored. of fishermen;  Incentivise fishermen and  Improving safety conditions on board of young people (through fishing boats, especially artisanal schools) to attend these fishery; courses.  Presenting to fishermen possible  Supporting fishermen in the diversification possibilities and creating Short to medium- Stakeholders and local diversification of their the awareness of their potential; Not available term action administration activities, following them  Supporting fishermen for concretely throughout the entire process, undertaking diversifications (new and monitoring their status species, new products, new selling even after that the new activity opportunities, etc., but also new has been run. activities, e.g. pesca-tourism);  Development of contracts with  Attract young people to the sector. feed providers for improving Furthermore, access to veterinary and reducing the time needed medicines should be also granted for the for access to medicated feed different farmed species, for ensuring and to veterinary medicine. safeguard of harvest against external pathogens. Fishery: Infrastructures dedicated to fishing activities are located in small ports and are  Launch of an ad-hoc study for limited. They compromise the expansion of identifying the best positioning the fishing activity and causes undesirable of ports/infrastructures, interferences with the movement of freight assessing natural conditions Local and central and passengers as the movement of Long-term action Not available and best port management administration passengers is growing. options. Specialised infrastructure for fishing  Identification of funding boats should be created, also in view of possibilities. possible divarication of fishermen activities in  Development of new facilities. tourism

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Stakeholders that Possible best Conclusion Time frame should activate the practice/flagship Measures for achieving them

measure project

No financial conclusion has been identified FINANCIAL

 Maritime transport Stakeholders that Possible best Conclusion Time frame should activate practice/flagship Measures for achieving them

the measure project

No legislative conclusion identified LEGISLATIVE

Ferry passengers: Improve ferry connections between Funchal and Porto

Santo.  Launch of an ad-hoc study for Operating conditions and efficiency of the assessing the potential of ferry connections with Porto Santo is a driver passenger ferry services and the for growth for maritime transport related to Local authorities Short to medium actual gaps between demand and passengers and synergies between ferry and ferry Not available term action offer.

transport and tourism sector in Porto Santo operators LEGISLATIVE

-  Establishment of a round table for (by the creation of travel packages) should be the concrete implementation of sought for further increasing the demand for

NON new connections. ferry services and supporting the development of tourism in Porto Santo,

reducing seasonality.

No financial conclusion has been identified FINANCIAL

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 Ports Stakeholders that Possible best Conclusion Time frame should activate the practice/flagship Measures for achieving them

measure project Planning spaces for Blue activities in port areas: considering the limited  The local administration should spaces in Madeira ports, adequate create a cooperation table management of spaces and involving all possible actors infrastructures should be developed, to dealing with maritime activities in be integrated within the specialisation port area and identify key model developed in the Archipelago. priorities and needs of different Major integration should be sought stakeholders. Local administration, between existing specialisations and:  These needs should be included in Short to medium involving stakeholders  fishing activities Not available a wider context of requalification term action of the Blue economy  recreational tourism (originated from of port areas in view of the around the port area diversification activities of fishermen development of new Blue or others) activities.  nautical tourism  Funding resources should be  ship repair. sought through the intervention of The purpose of this planning activity is to private capitals, involving private mitigate potential conflicts in the use of investors in the management of maritime space and create synergic ports (see the next conclusion).

LEGISLATIVE development of port areas Identification of new port management systems. As emerged from the analysis, port  Public authorities should launch a management model in Madeira ports is study for assessing possible public-driven. An analysis for alternative management models exploring possible alternatives port for Madeira ports. Short to medium Local administration management models should be carried Not available  The final step (long-term action) term action and private investors out in order to attract foreign would envisage the adoption of investments and develop infrastructures. the most appropriate model for The intervention of private investments developing needed could support the construction, infrastructures. maintenance and operation of some infrastructure and maritime port facilities

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Stakeholders that Possible best Conclusion Time frame should activate the practice/flagship Measures for achieving them

measure project Port infrastructures development was not backed by specific studies for assessing the optimal positioning of The practice of developing in-depth infrastructures for limiting adverse assessment of atmospheric conditions Short to medium impact of atmospheric conditions Local administration Not available for identifying the best infrastructural term action (storms, waves, tides, etc.). This type of alternative should be carried out studies should be carried out before before any investments is allocated. undertaking any type of infrastructural development in port areas Improvement of infrastructures dedicated to nautical and recreational tourism. Especially in the Funchal marina, but in general in the entire archipelago, there is a long waiting list for renting mooring place. The following interventions should be planned  Private – public round table with for supporting the development of all stakeholders potentially nautical tourism: involved in the port activities for  Development of mechanical identifying priorities and needs. equipments for accessing to the sea  Identification of possible (e.g. cranes, berths, etc.). Local administration, alternative for port management  Development of berthing facilities for Long-term action together with local Not available in order to attract private yachts over 25 meters.

stakeholders investments. LEGISLATIVE

-  Maintenance of structures currently  Launch of a study for assessing available. what type of infrastructural

NON  Development of docking stations, facilities should be developed in parking spaces, dry maintenance and relation to atmospheric support services. conditions.  Support for implementing services complementary to nautical and recreational activities (e.g. ship repair). A change of the port management system could bring private capitals for supporting these investments.

Realising the potential of the Outermost Regions for sustainable blue growth ANNEX 8 TO THE FINAL REPORT — THE BLUE ECONOMY IN MADEIRA

Stakeholders that Possible best Conclusion Time frame should activate the practice/flagship Measures for achieving them

measure project The gap analysis identified an overall Specialised courses in shipping and lack of qualified personnel in shipping logistics management could be held in and logistics management. This type Madeira. of expertise should be developed in the The industry should work closer to archipelago for driving the development training centres in order to better of the sector and create new jobs Short to medium Local authorities and meet the market need and the Not available opportunities. term action young people demand of qualified personnel. The creation of a sea school should be Furthermore, the industry should be taken into account for training this type more involved in the promotion of of expertise Blue Careers in order to attract new Collaboration between the industry and resources in training centres and in training centres should be fostered. the blue jobs opportunities. The analysis on growth drivers and  Public authorities should launch a barriers identified an overall difficulty study for assessing possible to mobilise financial resources for alternative management models maintaining and modernise ports for Madeira ports. infrastructures already built in the past Short to medium Local administration Not available  The final step (long-term action) programming period. term action and private investors would envisage the adoption of The involvement of private investments

FINANCIAL the most appropriate model for represents the only feasible solution for developing needed overcoming this limit, assessing new infrastructures. possible port management system.

 Ship repair

Stakeholders that should Possible best practice/flagship Conclusion Time frame Measures for achieving them

activate the measure project

Better management of spaces, see legislative conclusion for ports LEGISLATIVE

Realising the potential of the Outermost Regions for sustainable blue growth ANNEX 8 TO THE FINAL REPORT — THE BLUE ECONOMY IN MADEIRA

Stakeholders that should Possible best practice/flagship Conclusion Time frame Measures for achieving them

activate the measure project

The growing demand for this activity is hindered by the lack of equipment and material for repairing ships. In Definition of few words, spare parts are to agreement/contracts with available and need time to make Short to medium Operators Not available possible providers for making them available. For this reason, term spare parts available in due specific actions should be time; undertaken for making all needed material available for repairing ships.  Creation of specialised

training courses for qualifying and updating personnel. Although some qualifications exist in  The creation of a sea school the archipelago, new qualifications could represent a useful

should be made available for the tool for developing this type LEGISLATIVE - purpose of meeting the increasing of training. demand of ship repair from fishing  The industry should work NON vessels and leisure boats. closer to training centres in Short to medium Local authorities, sector Specialisations in these kinds of ship Not available order to better meet the term stakeholders repair should therefore be available market need and the and constantly kept updated at the demand of qualified highest levels. personnel. Collaboration between the industry  Furthermore, the industry and training centres should be should be more involved in fostered. the promotion of Blue Careers in order to attract new resources in training centres and in the blue jobs

opportunities.

No financial conclusion has been identified FINANCIAL

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 Coastal tourism Stakeholders that Possible best Conclusion Time frame should activate the practice/flagship Measures for achieving them

measure project

Better management of spaces, see legislative conclusion for ports LEGISLATIVE Support the diversification of the tourism offer benefiting from the manifold assets that Madeira can offer.  Increase the quality of services Diversifications requested by new tourism provided, especially demand that can be met in Madeira are: accommodation facilities (e.g.  Search of natural elements (landscape introducing certification of fauna, flora, etc.). accommodation activities) and  Coastal sports and maritime activities the qualification of staff. (whale watching, scuba-diving, surf,  Reduction of administrative bodyboard, windsurf, Stand up Paddle, burdens for licensing maritime recreational fishing, underwater Short to medium Local authorities, Not available activities (especially for archaeology, coasteering). term sector stakeholders fishermen).

LEGISLATIVE  Sailing, and the recent inclusion of -  Synergic development of Madeira in the Ocean Race of the maritime spaces in port areas for Extreme Sailing Series could generate

NON different activities sharing the further benefits for sailing/yachting same spaces and infrastructures. flows to the archipelago.  Creation of a brand for A brand could be created to promote promoting worldwide Madeira as recreational and nautical tourism, but a tourism destination. more in general to coordinate the local offer and improve its positioning in international market.

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Stakeholders that Possible best Conclusion Time frame should activate the practice/flagship Measures for achieving them

measure project Reduce the pressure of coastal tourism over the Funchal area. All (most) accommodation facilities are concentrated in Funchal, where there is  An ad-hoc study should be also the most important marina, services Short to medium launched for exploring new areas Local authorities Not available related to tourism, airport, etc. term for developing tourism in Tourism development plans should be Madeira. spread on a wider area in Madeira and in Porto Santo, reducing saturation of spaces in Funchal.

Development of infrastructures for nautical tourism: see conclusions reported in ‘Ports’

 Creation of life-long learning courses for training staff involved in the tourism sector. Increase the level of staff qualification  The creation of a Sea school in all branches of coastal tourism could represent the most (accommodation, services to tourists, appropriate tool for this purpose. amusement, etc.), but especially in  The industry should work closer nautical and recreational activities such as: Local authorities, to training centres in order to boats pilots, biologist, boat operators, Short to medium private operators, Not available better meet the market need and teachers, whale and dolphins watching term young people the demand of qualified operators, tourist guides, naturalistic personnel. guides, etc. adapting it to the sector’s  Furthermore, the industry should demand. be more involved in the Collaboration between the industry and promotion of Blue Careers in training centres should be fostered. order to attract new resources in training centres and in the blue

jobs opportunities.

No financial conclusion has been identified FINANCIAL

Realising the potential of the Outermost Regions for sustainable blue growth ANNEX 8 TO THE FINAL REPORT — THE BLUE ECONOMY IN MADEIRA

 Cruise tourism Stakeholders that should Possible best practice/flagship Conclusion Time frame Measures for achieving them

activate the measure project

Better management of spaces, see legislative conclusion for ports LEGISLATIVE

Cruise tourism allows to Madeira to offset traditional tourism seasonal cycles. For this reason, the position of Madeira in cruise tourism should be further consolidated by:

 develop joint initiatives with Setting up of a permanent major ship owners operating in negotiation table involving this region; cruising companies, local  enlarge cooperation with Canary Local authorities, cruise Short to medium authorities of Macaronesia Islands, Lisbon and the Azores companies and local Not available term and stakeholders, for better

ports; stakeholders LEGISLATIVE

- meeting demand of cruisers  create synergies product and increase the diversification, for example by

NON attractiveness of the offer. emphasizing the link between cruise terminal operations and shore-based activities (i.e. shore excursions or cruise port resorts);  improve infrastructures in Porto Santo for increasing stopovers of

cruise ships.

No financial conclusions have been identified FINANCIAL

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14. Potential projects for the Atlantic Assistance Mechanism

Atlantic assistance Mechanism Maritime activities Possible project priorities

Promotion of All sectors entrepreneurship in activities related to the sea Training of specialised operators All sectors Promote, through a marketing action, the sea jobs Develop mechanisms of knowledge transfer from the Promote entrepreneurship and Fisheries & aquaculture academic/scientific innovation communities to the entrepreneurial tissue Technical and economic feasibility study of the Fisheries & aquaculture submerged coastal marine ecosystems Technical and economic feasibility study on sea Renewal energies renewal energies (waves energy) Protect, secure and develop Create synergies between the potential of the Atlantic Coastal tourism protected areas and marine and coastal sustainable tourism environment Creation of a promotion tool for the marketing of Improve accessibility and Coastal tourism products and services linked connectivity to maritime tourism activities Promote synergies between fishing and nautical tourism. Fishery and aquaculture Promote synergies between fishing and HORECA sector. Create synergies between ferry passenger transport Coastal tourism and coastal tourism (travel Create a socially inclusive and packages) sustainable model of regional Creating the possibility to development Maritime transports have alternative fuels in ships (LNG) Develop cooperation with ship-owners and cruise Cruise tourism operators and enlarge cooperation with other ports.

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Roles and contributions to external initiatives

 Transatlantic Ocean Research Alliance Cooperation in the field of ocean observation for a better understanding of the Atlantic Ocean and promotion of a sustainable management of its resources, a more sustainable and profitable fisheries management, a better articulation between all the activities that take place Including the exploitation of new natural resources from the deep ocean.

 Ocean governance The potential contribution of ARM to Ocean governance is related to:  cooperation in R&D and knowledge of sea resources;  cooperation on maritime transport and in particular for which concerns the sharing of information.

 EU neighbourhood actions Several activities may play a role in EU neighbourhood cooperation:  technology transfer in biotechnology and renewable energy;  education & training on specific skills in maritime activities;  cooperation on tourism to develop ARM image;  exchanges of best practices.

List of interviewees

Organisation Maritime activities concerned Number of interviewees

Direção Regional da Economia Ports, cruising, ferry e Transportes transport, Nautical sports, air 1 transport Secreteria Regional dos All maritime activities Assuntos Parlamentares e 2 Europeus Observatório Oceânico da Fisheries and aquaculture 1 Madeira Direção Regional de Pescas Fisheries and aquaculture 3

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823

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doi: 10.2826/2810