Portugal will launch a pioneering auction in the second half of this year for rights to sell hydrogen for injection into the national gas grid, which some see as a key step in kickstarting Europe’s fledgling hydrogen market.

Under the terms of the auction, energy group Galp Energia will contract to buy hydrogen mixed with natural gas from producers and resell it to meet demand, a system designed to boost investment in production by giving suppliers a guaranteed buyer.

That would remove the need for dozens of bilateral contracts between suppliers and consumers.