Up to 1.6 million hydrogen-powered cars could be on UK roads by 2030, a Government-industry joint report said today.
Up to 10 per cent of new-car customers would be receptive to hydrogen fuel cell electric vehicles (FCEV) when they are introduced, the interim report produced by the UKH2Mobility project predicted.
Initial uptake of FCEV would progress as models made their way on to the market and the fuelling network matured, and once mass FCEV production brought costs down there was the potential for 1.6 million vehicles on UK roads by 2030, with annual sales of more than 300,000.
Business minister Michael Fallon said: "The transition to ultra-low emission vehicles has already begun. It has the potential to create really significant new economic opportunities for the UK, to diversify national energy supply and to decarbonise road transport.
"The findings released today demonstrate that FCEV can make a significant contribution to this."
But the report said first a co-ordinated network of hydrogen refuelling stations would need to be established, focusing initially on national trunk routes and heavily populated areas.
An initial roll-out of 65 stations would provide sufficient coverage in line with early vehicle sales, with the network growing in line with the number of FCEV on the road to provide 1,150 sites by 2030.
The report said replacing diesel vehicles with FCEV could reduce UK annual total vehicle CO2 emissions by three million tonnes in 2030 and save between £100 million and £200 million a year in the cost of damage to air quality caused by vehicle emissions by 2050.
Mr Fallon said: "Successful commercialisation of the technology will require Government to work in true partnership with industry. Our international rivals are looking to steal a march in this area and so UKH2Mobility recognises the importance of prompt action to ensure the potential benefits are realised by businesses and consumers in the UK.
"We already have a strong automotive sector and must ensure it stays that way. Opportunities for the UK to take a leading role in low-carbon technologies will be looked at as part of our auto industrial strategy, published later this year."
With the fortunes of battery powered cars faltering hydrogen-fuelled cars are seen as the next frontier of the automotive industry, and auto firms are pouring millions of research dollars into moving past hybrids into fully hydrogen fuelled models.
In the US total electric vehicle sales last year were only 14,687, representing 0.1 per cent of total sales of 14.5 million. In comparison, hybrid sales in 2012 climbed to 473,083, or roughly 3.3 per cent of the market.
Toyota vice Chairman Takeshi Uchiyamada, the "father of the Prius" who helped put hybrids on the map, said he believes fuel-cell vehicles hold far more promise than battery electric cars.
"Because of its shortcomings - driving range, cost and recharging time - the electric vehicle is not a viable replacement for most conventional cars," he said Uchiyamada. "We need something entirely new."