Japan, seen as a leader in the field, has also been negotiating a similar government-level arrangement with the European Union, focusing on unified standards and possible joint research and development.

Visiting US Secretary of Energy Spencer Abraham and Goji Sakamoto, the senior Japanese vice minister of economy, trade and industry, signed a joint statement of intent on bilateral cooperation on hydrogen and fuel cells.

The US Department of Energy and the Japanese ministry will consider signing a "written arrangement for R and D cooperation in fuel cell technology and hydrogen production, storage and infrastructure technologies," the statement said.

The statement also committed the two governments to take part in workshops and seminars and exchange experts and information on these technologies.

They will deal with policies, including "common codes, standards and regulations and requirements to develop hydrogen fueling infrastructure," it added.

"The United States and Japan both recognize the contribution research and development can make to the development of a hydrogen economy and to cost-effective technologies to meet future global energy needs," Abraham said in a statement released the US Embassy in Tokyo.

US President George W. Bush announced in his budget address in February last year he would spend more than 1.7 billion dollars on developing hydrogen as a power source over five years.

Invented in 1839 by British physicist William Grove, the fuel cell produces electricity by combining hydrogen and oxygen, and its only by-product is harmless water vapour.

The main advantage of the fuel-cell battery is its very long life -- up to four or five times that of conventional dry-cell batteries.

"Hydrogen can be derived from multiple feedstocks, which fosters fuel versatility," the US embassy press release said.

"End-use technologies that employ hydrogen, such as fuel cells, are more efficient and can be used safely while improving the environment and public health."

The world's leading carmakers, including Japan's Toyota, US giant GM and Daimler-Chrysler, have been racing to develop cars developed by fuel cells.

In 2002, Toyota and its domestic rival Honda became the world's first carmakers to start leasing fuel-cell cars, but they are still far from becoming part of everyday life because of their very high cost and the difficulty of transporting hydrogen.

Japan's domestic market for fuel cells is estimated at one trillion yen (9.4 billion dollars) in 2010 and eight trillion yen in 2020, according to the economic daily Nihon Keizai Shimbun.

A French expert in fuel cells said last month that Japanese research into small fuel cells for use in portable appliances such as laptop computers is up to three years ahead of the United States and four-five years ahead of Europe.

SPACE.WIRE