"Of all the technologies, the fuel cell car seems to be the most promising, it has a good chance of becoming the next mass market car," said Byron McCormick, co-director of the global alternative propulsion centre at US car maker General Motors.

The environment has been a driving force behind the investment in research into such technology, with new regulations imposing targets for reducing carbon dioxide emissions.

Other factors are the growth in global population and increasing demand for cars in emerging economies, said McCormick.

Who will be first?

Who will be the first to launch a commercially viable fuel cell car?

The US state of California gave the initial push,when as part of its 1990 programme on reducing emissions, it required that by 2003, 10 per cent of newly registered vehicles will have to have zero emissions.

Since then, California has supported new fuel cell car technology.

Despite the enthusiasm, fuel cell technology is still in its infancy, although car makers say they have made fast progress in the last two years. "It's too early to say whether there is a potential market for a fuel cell car. We're very interested in the US and Californian market, but first we have to come up with a viable product," a sales and marketing representative at German car manufacturer Daimler-Benz told Reuters.

Daimler-Benz has taken the European lead in producing an eco-friendly car, working in cooperation with US car manufacturer Ford and Canadian power technology company Ballard Power Systems. It is hoping to produce a commercially available fuel cell car by 2004.

In May, Daimler-Benz's latest prototype, the NECAR 3fuel-cell vehicle made its first long-distance testdrive. The car is based on the Mercedes-Benz A class and has its own on-board hydrogen generation unit.

The car uses liquid methanol as fuel, which it transforms into hydrogen gas from a reformer at the rear of the vehicle. The gas is processed in the fuel cell, where electricity is generated to run the engine.

Previous experimental vehicles used hydrogen, a gas that cannot be handled as easily as methanol by existing retail petrol stations.

Methanol has been used as a fuel in conventional engines, as part of a government subsidised programme in Brazil, but it was found to affect conventional combustion engines.

DBB Fuel Cells Engines GmbH -- a joint venture in which Daimler has a majority 51 per cent stake, Ballard holds 26 per cent and Ford 21 per cent -- developed the engine for Daimler-Benz.

The three partners have together invested more than $700 million in the partnership, compared to a total budget of 9.75 billion marks ($5.41 billion) in 1997 in research and development for Daimler-Benzalone.

The fuel cell car developed by its competitor General Motors, part of the EV1 series of clean cars, also has an on-board fuel cell and batteries and uses methanol.

The company said it intends to have a production-ready hybrid electric vehicle by 2001 and a fuel cell one by 2004.

Unlike Daimler-Benz, General Motors has worked alone on new technologies until now, but the company says it is also considering partnerships with other companies.

The oil industry, recognising the potential of the fuel cell car and its threat to gasoline production, has quickly joined car makers to work hand in hand on new technologies.