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On Monday morning, Portugal announced that it would launch a pioneering auction for rights to sell hydrogen for injection into its natural gas grid in the second half of this year. This will be the first auction in Europe and is part of the country's efforts to reduce greenhouse gas emissions.
The Portuguese government has set ambitious targets to reduce emissions by 2030 and is now looking to green hydrogen to meet those goals. Hydrogen can be produced from renewable sources such as wind and solar energy, and when injected into the natural gas grid, it can replace fossil fuels like coal and natural gas.
The auction will be managed by a new body called Gás Natural de Portugal (GNP), which will buy renewable hydrogen and biomethane at auction and then sell it on to gas companies. The aim is to increase the amount of green hydrogen in the natural gas grid from 1% today to 10% by 2030.
"This is an important step towards achieving our climate objectives," said Gabriel Sousa, GNP's representative in Lisbon. "We are confident that this auction will help us reach our goal of reducing emissions while also providing economic benefits for businesses."
The Portuguese government has already taken steps towards increasing the use of green hydrogen, including investing in research and development projects related to electrolysis technology, which produces hydrogen from water using electricity.
It has also launched initiatives such as H2Global to facilitate imports of renewable ammonia, e-methanol and sustainable aviation fuel through auctions.
However, some limitations are associated with blending hydrogen into the European gas grid. For example, due to safety concerns, there is a limit on how much hydrogen can be blended into existing pipelines without risking explosions or other accidents.
In addition, there currently need to be regulations or standards in place governing how much hydrogen should be blended into the grid or how it should be stored safely.
Despite these challenges, Portugal remains committed to reducing emissions through the increased use of green hydrogen. The upcoming auction is expected to provide an essential boost for businesses involved in producing renewable fuels while also helping Portugal meet its climate targets.
By Michael Kern for Oilprice.com
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Michael Kern is a newswriter and editor at Safehaven.com and Oilprice.com,