Unlisted Japanese oil refiner Idemitsu Kosan Co. (IKC.YY) has developed a kerosene-based hydrogen fuel cell that could be used to produce electricity for households, provided test runs of the cell at a pilot plant yield favorable results.

The test runs, which will start later this year at the company's premises and last for about 12 months, will help Idemitsu determine whether the fuel cell system can be commercialized, a company spokeswoman said Friday.

Idemitsu earlier developed technology to extract sulfur from kerosene, and then produce hydrogen from the kerosene. This hydrogen is then used to power the fuel cells.

The fuel cells will be able to produce up to 1 kilowatt of electricity each, equivalent to the volume that a household consumer typically uses.

"We hope to reduce production costs for fuel cells and introduce them to the market for a sales price of about Y450,000 by the year 2010," said the spokeswoman.

Last year, Idemitsu Kosan developed a 5-KW hydrogen fuel cell that can produce sufficient electricity for a small-sized restaurant or drugstrore. That fuel cell is still undergoing test runs, and hasn't been commercialized yet.

Other Japanese oil refiners such as Nippon Oil Corp. (5001.TO) and Cosmo Oil Co. (5007.TO) have also accelerated development of similar technologies to produce hydrogen from refined oil products such as naphtha and liquefied petroleum gas, to capitalize on expected demand for hydrogen fuel cells.