Two drivers are pushing the development of new vehicle propulsion technologies and alternative fuel options. In the U.S., energy security has become a main challenge, intensified by the latest geopolitical events. For Europe, global climate change is at the top of the political agenda, creating dynamic research and development fields for new technologies.

The Climate VISION program represents the Bush administration's goal of reducing U.S. greenhouse gas emission intensity by 18 percent during the next 10 years. Europe focuses on absolute emission reduction. The European vehicle manufacturers' (ACEA) voluntary commitment to reduce vehicle fleet average emissions to 140 grams carbon dioxide per kilometer and the European Unions target to install a legislation of 120 grams limit if the ACEA commitment fails represent the drivers for vehicle manufacturers to increase their efforts of cost-effective energy efficiency improvements in propulsion system technologies. The EU also announced to set up a target of 5-10% renewable fuel share in the European fuel market.

Fuel cell vehicles and hydrogen have become famous components of a possibly "sustainable" mobility concept for future generations. However, the debate is a quite complex one and requires an integrated view on both vehicle propulsion technologies and corresponding fuel concepts.

From an economic perspective it is necessary to use resources efficiently. As for road transportation, there are principally two solution paths that should be followed in parallel. First, advanced internal combustion engines with direct-injection, vehicles using lightweight materials, advanced electronic motor management, and hybrid drive systems as well as improvements in aerodynamics and rolling resistance can increase energy efficiencies.

Second, new drive systems may be introduced in future vehicle generations. Fuel cell systems are able to reach no or extremely low local emissions as well as improved vehicle efficiencies. The production of hydrogen or methanol from natural gas is cheaper than the production from renewable energies but energetically more intensive than the production of diesel or gasoline fuel. Fuel cell vehicles, due to their higher vehicle energy efficiency, can compensate these "well-to-tank" losses. In the middle term and long term, fuel cell systems promise to be cheaper and have advantages regarding energy consumption and emissions compared to complex modern internal combustion engines. Fuel cell drive systems are especially advisable with the use of alternative fuels from renewable resources struggling with higher well-to-tank losses than conventional fuels. Fuel cell vehicles convert fuels into drive energy very efficiently.

Local emissions of fuel cell vehicles are mostly water vapor for hydrogen- powered fuel cell systems. Methanol fuel cell vehicles emit water vapor, carbon dioxide, and marginal quantities of further emissions. Since local emissions have been reduced considerably by emission legislation and catalyst and exhaust after-treatment system technologies, we focus on greenhouse gas emissions.

To significantly enhance the development of clean urban transport, authorities of 10 European metropolitan areas participate in a joint fleet test with 30 fuel cell powered buses. Fuel cell vehicles have been presented as concept cars by various automotive companies and are currently at the stage of further development to market introduction. Current development covers high-tech materials for fuel cell components, system integration and miniturization, hydrogen storage technologies, as well as reducing overall system cost.

Selecting appropriate fuels and fuel production technologies are a vital prerequisite for designing a concept for future mobility and the competitiveness of both energy and automotive companies. Hydrogen can be derived from fossil resources such as natural gas, resulting in an energetic loss of approximately one third of primary energy. Gasoline and diesel, in contrast, can be produced at 85-90% of energy efficiency. Therefore, fuel cell vehicles have to compensate the higher energy losses in the fuel production chain to be competitive, both economically and ecologically, with conventional diesel and gasoline powered internal combustion engine vehicles.

When fuels are produced from renewable resources, however, fuel cell vehicles are the technology of choice of utilizing these high-value fuels most energy-efficiently. Hydrogen produced via electrolysis from wind and solar power features almost zero carbon dioxide emissions. The same holds true for producing methanol from waste wood and residues. Bio-methanol has the advantage of being a suitable fuel for fuel cell vehicles and internal combustion engines. Conventional vehicles can be operated with blending biomethanol or bioethanol up to 3-5% to conventional fossil gasoline and diesel. This approach may help to establish a market for fuels from renewable resources since no new refuelling infrastructure is necessary and the fuel can be consumed by today's vehicle fleet.

In Germany, research projects are underway to explore the production of methanol and synthetic diesel from waste wood and residues. In addition to hydrogen powered fuel cell vehicles, this could supplement our options for climate benign mobility and help to reduce our dependence on fossil fuel imports.

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