Car producer Nissan is to start leasing a fuel cell vehicle, based on its X-Trail sport-utility vehicle, to Cosmo Oil.

Nissan will be the fourth automobile manufacturer in the world to launch a fuel cell vehicle, following Toyota, Honda and DaimlerChrysler.

Fuel cell vehicles are powered by electricity generated from a chemical reaction between hydrogen and oxygen, and emit only water as a by-product. The cells produce electricity by combining hydrogen and oxygen over a platinum catalyst.

Global auto giants are going head to head in the development of fuel cell vehicles, which are being seen as a frontrunner for the next generation of eco-friendly cars.

Toyota and Honda, which took an early lead by leasing fuel cell vehicles from December 2002, have already supplied 15 and 10 units, respectively, to public and private sector users.

Nissan slightly lagged behind its rivals due to its financial woes in the late 1990s, but now intends to catch up by reinforcing its development program following the dramatic turnaround of its business under President Carlos Ghosn.

The major Japanese automaker will announce the leasing fee when it delivers the X-Trail FCV to Cosmo on March 29.