News analysis: The green engine of the future

Picture a leafy London street in 2026. It's 8.45am and a line of 4x4s inches up to the gates of a school. The first Chelsea tractor glides to a stop, a door swishes open, and a small child clambers down carrying an iridescent palmtop bearing a Save the Earth sticker. Admonitions to be good, eat well and have fun follow her to the pavement. "Bye bye, Mummy." The door snicks shut and the ruling behemoth of the 21st century powers into traffic.

Will we have learnt nothing in 20 years? Won't a national carbon tax have driven these dinosaurs to extinction? Surely fears about climate change, top-rate congestion charges of, say, £75, and, for heavy polluters, annual parking fees approaching four figures will have brought the motoring public to their senses.

Despair not. Big cars may never win favour with the cycling fraternity, but in the future, they won't necessarily be towing the planet to its doom. While many SUVs today emit around 300g of CO2 per kilometre, in two decades' time they could be producing as little as 5g, and that only because traces of lubricants inevitably seep into the cylinders. Instead of pumping out greenhouse gases, the exhausts of these vehicles will drip almost pure water.

At least, that's what BMW is betting. The company will produce the world's first batch of 100 hydrogen-burning cars next year. London's Mayor, Ken Livingston - who proposed last week that the congestion charge be raised to £25 a day for the most-polluting vehicles - is interested in borrowing one for a trial.

BMW's dual-fuel Hydrogen 7 is based on the company's 760 model. The engine block is the same - with the familiar four-stroke cycle of suck, squeeze, bang and blow - though the cylinder head has been re-engineered and additional plumbing installed to draw the hydrogen from an insulated tank, where it is stored as a liquid at -253C.

The hydrogen economy is exciting executives in the automotive industry. Larry Burns, GM's vice-president of research and development, talks of "an entirely new DNA for automobiles", switching from a heritage based on petrol and mechanics to one of hydrogen and electronics.

Some oil companies, such as Shell and Chevron, are also enthusiastic, Mr Burns notes, seeing themselves as energy companies rather than just suppliers of fossil fuels, though others are still counting on being able to undercut the price of alternative energy sources.

Despite their lousy environmental reputation, SUVs remain immensely popular with motorists, and profitable for car makers. The December issue of What Car? has them on its cover, under the headline "4x4 Superstars", with a 12-page story inside. Suburban parents like the sense of safety these vehicles project when they're ferrying children around.

The Nissan Design Centre in Paddington is housed in a listed former railway maintenance building designed by the Modernist architect Paul Hamilton. Cacti line the underlit glass path through the lobby to a wall that curves up and back. The culture is secretive. Visitors are allowed no more than a peek into the design studio or the room where clay models are carved.

Stéphane Schwarz, the centre's design director, is the epitome of a modern European: born in Switzerland, raised in France, educated in Italy and employed in Germany before his transfer to Britain. He talks animatedly about Qashqai, a conventionally powered cross between an SUV and a popular C-class hatchback, with a panoramic glass roof.

He uses words such as "nomadic", "tribe" and "hedonism" to describe cars of the future. He is passionate about materials, and is already thinking about seats made of a thin mesh instead of foam, and of interiors that change colour with the help of nanotechnology. "The boundary between design and technology is going to be shattered," he predicts.

The design horizon for a new car is only three and a half years, from sketch to production, so even if he wanted to, Mr Schwarz couldn't say what we'll be driving in 2026, but 4x4s will be part of the fleet. New fuels and engines open up opportunities for designers, he argues.

Using hydrogen as a fuel is not a new idea; it burns 10 times faster than petrol (think of the Hindenburg) and powers the main engines of America's space shuttles. Importantly, it can be extracted from water with electricity produced by solar, wind, wave, tide, geothermal or nuclear generators.

But it still has a long way to go before it becomes the world's main motoring fuel. Hydrogen is expensive, especially if it's made from environmentally friendly sources. The cheapest supply comes from methane, by a process that produces CO2, although this could in the future be sequestered.

Even if the cost of making green hydrogen falls enough to match the rising price of fossil fuels, the problem of infrastructure remains. Britain has only one garage with a hydrogen pump: BP's site in Hornchurch, Essex. To refit all the UK's 9,600 filling stations would be daunting.

What's more, station owners will be reluctant to switch until they're sure which new fuel will triumph, for an internal combustion engine running on hydrogen is not the only option.

Like most experts, Professor Garel Rhys, the director of the Centre for Automotive Industry Research at the Cardiff Business School, sees hydrogen as the long-term answer to petrol, but he thinks that it might take longer than 20 years, possibly as many as 40, to get there. One difficulty for developers of alternative fuels is that they will be aiming at a moving target, he says. "The existing technology is not going to stand still."

Another is that companies are pushing different solutions. Among the most popular are hybrids, which combine petrol or diesel engines with electric motors. Not surprisingly, many of these are SUVs, among them the Ford Escape, Toyota Hylander and Honda CR-V.

Ford is also promoting its FlexiFuel cars, powered by a mix of petrol and ethanol made from plants. It claims they cut CO2 emissions by up to 70 per cent. Other fuels, such as liquid petroleum gas, offer less of a carbon saving. These technologies, says Professor Rhys, are stopgaps. "In essence, they are holding the line until we free ourselves from carbon. Eventually they'll all die out in favour of hydrogen."

The leading rival to BMW's hydrogen engine in the long run is likely to be the fuel cell. This also uses hydrogen, but in a different way - more like a battery than an engine. Already, London has a fleet of three fuel-cell-powered Daimler Chrysler buses on the RV1 route between Covent Garden and Tower Gateway.

And in Hawaii, Hyundai has been testing a battery-powered car with a technology called fast-recharge, which can "refuel" in less than 30 minutes, down from six to eight hours.

Joe Molloy, the chief executive of Concept Group International, a Coventry consultancy, worries that this plethora of alternatives is applying the brakes to the new standard: "What we need is an independent advanced technology centre."

This situation is not unprecedented. In the early 20th century, no one was sure whether cars would be powered by petrol, batteries or even steam. The difference is that by 1910, when petrol emerged as the clear winner, the investment that had to be abandoned was small. Now, with 830 million cars and trucks around the world, it's huge.