Fuel Cell Works Supplemental News Page

Communist Party and multinational auto giants are gearing up to fill the nation's roads with hydrogen-fuelled vehicles, but experts say the shift away from fossil fuels will take decades.

China had some 24 million vehicles on its roads at the end of last year, a figure expected to soar to more than 30 million by the end of 2005, according to government estimates.

With millions more vehicles each year and a continuing dependence on coal for producing electricity, it is expected to overtake the United States soon in overall emissions of carbon dioxide, though its 1.3 billion people will remain far behind in per capita emissions.

Convinced that hydrogen offers the best long-term solution to urban air pollution from vehicle emissions, the government has allocated some 2.4 billion yuan (290 million dollars) for research into hydrogen and other alternative vehicle fuels since 2001.

Besides reducing emissions of greenhouse gases by switching to hydrogen, the government also wants to curb its dependency on imported oil and allow its own huge auto industry to make the technological leap necessary to compete with the multinationals.

Lun Jingguan, coordinator of the China Fuel Cell Bus Programme, expects to see the first hydrogen-powered vehicles produced in small numbers in China from 2010 to 2015. "Mass production will be after 2020," he told Deutsche Presse-Agentur dpa.

DaimlerChrysler, one of the multinationals hoping to introduce hydrogen-fuelled vehicles into the Chinese market, sees a similar timetable. "We expect that we will see a variety of internal combustion engines - petrol and diesel - hybrids, natural gas, alternative energy and fuel cells for a long time to come because each has advantages for specific applications," said Trevor Hale of DaimlerChrysler China.

Another multinational, General Motors, is jointly developing an eight-seater Phoenix fuel cell vehicle with Shanghai Automotive Industry Corporation. The Phoenix is powered by compressed hydrogen, creating electricity from its fuel cell and storing it in a battery that can drive a 47-horsepower electric motor, the company said.

Most experts see hybrids as an interim solution, bridging the gap in funding and technology until hydrogen-fuelled vehicles become the industry standard. While cheaper, hybrids offer fewer environmental advantages than pure hydrogen-fuelled vehicles and still rely on oil. They also use both storage batteries and internal combustion engines.

"(Chinese) car companies are more interested in hybrids, although they have not gone onto the market yet," Lun said.

After decades of close state control in a planned, developing economy, the engine technology of China's car producers is on average 20 years behind that of Western firms, said Wang Gang, chief scientist for the government's project to develop electric cars.

But Wang said Chinese car producers are only two years behind world leaders in hydrogen fuel cell technology, and perhaps five years behind in technology for hybrid vehicles.

Two of China's largest vehicle producers, Dongfeng and FAW, are among the firms researching both hybrid and hydrogen technology.

Beijing's first hydrogen refuelling station is scheduled to open next July, said Ouyang Minggao of the Automotive Engineering Department at Qinghua University. "In 2008, there will be around 10 (hydrogen fuelled buses) on trial routes around the city," he said.

Three hydrogen-fuelled DaimlerChrysler buses will take to the streets of Beijing next year.

Hydrogen-powered buses are likely to be a common sight in Chinese cities by 2015, with the narrowing technological gap enabling Chinese manufacturers to compete with the global auto giants by producing much cheaper fuel cells, Ouyang said.

Hybrids are likely to make a bigger impact in 2008. Dongfeng has signed a contract with the government to provide 500 hybrid buses and 2,000 hybrid taxis by 2008, state media said.

But the scale of China, the pace of its economic growth, and the number of years needed to develop hydrogen technology for mass production, all make it impossible to say when and how far China will reduce its consumption of oil.

Officially, China's total oil imports reached 91 million tons in 2003, 31 per cent higher than in 2002. This year, imports are forecast to reach up to 120 million tons, with consumption rising to 310 million tons.

DaimlerChrysler has emphasized the need for strong government policies to promote widespread use of hydrogen-fuelled vehicles.

"To achieve the breakthrough in this revolutionary propulsion technology - particularly with regard to the infrastruucture - it requires close cooperation not only of the motor manufacturers but also of the energy industry and political leaders," Hale said.

Wang said the government is likely to promote demand for electric, hybrid and hydrogen-fuelled vehicles through taxation policies. But Lun said it is too early to talk about how road, fuel and sales taxes might be used to encourage people to switch to alternative vehicles.

No government policy on the phasing in of alternative fuel technology is likely before 2010, Lun said. "For the moment China should keep upgrading the fuel every year," he said. "It is difficult to say how many years it will really take to affect China's oil imports."