Canadian researchers say they have found a way to make hydrogen fuel cells cheap enough to replace traditional gasoline engines in vehicles.

Fuel cells produce electricity from the chemical reaction when hydrogen and oxygen are combined to make water.

Researchers at the University of Waterloo in Canada have developed a new fuel cell that lasts at least 10 times longer than current technology, an improvement that would make them economically practical, if mass-produced, to power vehicles with electricity.

“With our design approach, the cost could be comparable or even cheaper than gasoline engines,” said Xianguo Li, director of the Fuel Cell and Green Energy Lab at Waterloo.

“We have found a way to lower costs and still satisfy durability and performance expectations.

“We’re meeting economic targets while providing zero emissions for a transportation application.”

Researchers initially concentrated on hybrid vehicles, which now have gas engines as well as batteries due to issues involving limited driving range and long charging times.

The hope is that the introduction of fuel cells in hybrid vehicles will lead to mass production and lower unit costs.

The researchers say this could pave the way for the replacement of both batteries and gas engines entirely by providing an affordable, safe, dependable, clean source of electrical power.

Hydrogen cars are already being trialled on the road in parts of Australia, while earlier this year Queensland became the first Australian state to ship 200g of “green” hydrogen.

Federal Labor has outlined a $1 billion commitment towards a “National Hydrogen Plan” if it wins government at the upcoming election.

Meanwhile, Western Australia formed its own Renewable Hydrogen Council in October last year, not long after government-backed CSIRO released what is essentially a blueprint for the development of the hydrogen industry in Australia.

“Australia has got enormous potential to be a real leader in this industry if we seize the opportunity,” Geoff Ward, CEO of Hazer Group, told Stockhead.

Ward said that Australia — like Canada, which has carved out a position for itself as a world leader in fuel cells — has great engineering capability for developing and improving fuel cell products.

“We can play a role in the design and manufacture and development of efficient fuel cell vehicles,” he said.

“Even though the car manufacturing industry has shut down in Australia, a number of the global carmakers still retain development design facilities here and we’re still a supplier of parts for that supply chain.

“I think that’s actually a great opportunity in the future for us to move into new areas such as fuel cells in vehicles.”

Ward said hydrogen is the “missing link” that allows a modern economy to make the most use of low-cost renewables by being a means of storage, a low-emission transport fuel and a source of power and heat.

The market potential for hydrogen is huge.

The global market is worth $US130 billion ($186.4 billion) and the industry is forecast to grow to $US2.5 trillion by 2050, according to Morgan Stanley.

Though investment opportunities are limited at the moment.

Perth-based Hazer is the only ASX-listed player dabbling in hydrogen. It has developed a technology for producing hydrogen and graphite from natural gas and unprocessed iron ore.

One of Hazer’s goals is to be the first to supply hydrogen to the Australian market using its own technology.

Ward said hydrogen vehicles are becoming more and more competitive and are expected to become a major part of the transport system in the short to medium term.

“And clean hydrogen produced from renewable resources is expected to be the key fuel,” he said.

>>WATCH NOW: 90 Seconds With…Geoff Ward, Hazer