Transport secretary Alistair Darling has told the House of Commons that that there are both competitiveness and environmental reasons to encourage the development of new vehicular technology based on hydrogen.

Responding to an oral question from Bury North MP David Chaytor concerning the need to increase the fuel efficiency of large vehicles and the use of biofuels, Mr Darling said he believed that there was a need to invest in hydrogen and liquefied gas as well.

Labour MP Mr Chaytor asked the transport minister: "Given that the United Kingdom is shortly to become a net importer of oil and that we face the global peak of oil production by the end of the decade, is not the real issue for competitiveness to increase the fuel efficiency of large vehicles and to encourage the use of more biofuels?"

Mr Darling replied that engines "generally are cleaner and much more efficient than they were ten or 20 years ago".

"The Government support that trend and want to encourage it-the road haulage modernisation fund is one way in which we do so. There are some very good examples of new technology that are improving matters."

"Looking further ahead, we need to invest in the possibilities of using fuels such as hydrogen," he added.

The news follows reports earlier today from Michigan where a new hydrogen fuelling station has been unveiled by US firm DTE Energy as part of the development of the nascent hydrogen economy.