The new US budget being proposed would give an additional $35 million in funding to hydrogen research in 2006.

The Hydrogen Fuel Initiative was set up in 2003 to further research into hydrogen production technology and hydrogen storage, and was promised funding of $1.2 billion over a five-year period.

The budget would also reportedly provide $3.6 billion in tax incentives until 2010 to encourage renewable energy, including hybrid and fuel cell vehicle purchases.

Extra funding will go into developing cleaner coal technologies, specifically by improving the environmental performance of coal power plants by reducing emissions and improving efficiency.

FutureGen, a coal-fuelled, near-zero-emissions electricity and hydrogen generation project will also receive funding.

However cuts in other renewable energy projects have been criticised by environmental groups. The Sustainable Energy Coalition points out that despite increases in hydrogen funding, the overall funding for renewable projects is cut by around four per cent.

It intends to work with members of the US senate to restore and even increase the funding, as well as explore options for new revenue sources to ensure consistent support for research into renewable energy technologies.