An agreement to buy the Mercedes-Benz Citaro fuel cell buses was inked in Beijing on Tuesday, the UN Developmental Program (UNDP) said in a press release.

The buses are expected to be driving the streets of Beijing in September and could become part of a fleet of environmentally-friendly vehicles that will be showcased during Beijing's "Green Olympics 2008," it said.

The purchase of the buses are part of a 15.9 million dollar project between China's Ministry of Science and Technology (MOST), the Global Environmental Facility and the UNDP to develop hydrogen powered vehicles, it said.

Hydrogen energy and fuel cell technologies "will not only help to reduce the transport sectors dependence on traditional fossil fuels, but will also help to introduce a new clean hydrogen energy era," it said.

Fuel cell vehicles are powered by electricity generated by a chemical reaction between hydrogen and oxygen in a power plant built into the car's chassis.

The electricity generated by the hydrogen fuel cell drives newly developed motors built into the hubs of the vehicles that perform similarly to gasoline powered engines but emit only water vapor as a waste product.

These new vehicles do not produce greenhouse gases like carbon monoxide, or other pollutants normally attributed to the burning of fossil fuels.

"China is formulating its energy strategy for the next two decades and hydrogen energy -- as a kind of clean, efficient, safe and sustainable energy resource -- has been put on the nation's energy development priorty list," the China Daily quoted Shi Dinghuan, MOST's secretary general, as saying.

China is also developing several of its own domestically built hydrogen-powered cars including a prototype by the Shanghai Fuel Cell Vehicle Powertrain Co Ltd based on Volkswagen's popular Santana 2000, the paper said.

TERRA.WIRE