Germany said Tuesday it would invest 500 million euros ($600 million) over the next decade in developing vehicles powered by hydrogen, which is considered one of the energy hopes of the future.

"We will increase our commitment and our funding by 500 million euros over the next 10 years," Transport Minister Wolfgang Tiefensee said. He was speaking at the opening of a second hydrogen refueling station in Berlin. The German capital's transport authorities have promised to introduce a fleet of 14 hydrogen-powered buses by 2007 in a bid to become the European "capital" for the low-pollution technology.

Federal funding for the development of hydrogen-powered vehicles is to be expanded to other German regions -- such as Hamburg, southern Germany and parts of North Rhine-Westphalia -- in the next few years.

Hydrogen-power hurdles

However, there are several hindrances to the development of hydrogen-powered vehicles, principally the cost of building refueling stations.

Another hurdle is reducing the cost of obtaining hydrogen itself, which has to be extracted from fossil fuels, such as carbon, or from water.

"As a fuel for cars, hydrogen technology has a long way to go," Tiefensee said.

Cleaner technology could become more affordable

Experts from German automaker BMW predict that the cost of hydrogen technology could be reduced to levels affordable for individual consumers by 2015. Even then, basic hydrogen-powered cars would cost up to 3,000 euros (3,600 dollars) more than gasoline models at today's prices.

BMW, DaimlerChrysler, Ford and GM/Opel are the four car manufacturers involved in the Clean Energy Partnership, an international group set up to develop hydrogen power which receives support from the German government.