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Wednesday, 21 August, 2002, 14:21 GMT 15:21 UK
Hydrogen Economy

Their ancestors the Vikings are better known for the way they pillaged and despoiled. But now Icelanders are offering to show the rest of the world how best to clean the planet up and protect the fragile resources of the earth.

As world leaders head for the earth summit in Johannesburg, Iceland is embarking on a radical plan to abolish the burning of fossil fuels altogether - by transforming itself into the world's first "hydrogen economy".

It aims to run all its transport and even its huge fishing fleet on hydrogen produced in Iceland itself.

Shirin Wheeler reported from Iceland.

It's the fourth round of the National Monster Jeep Championships, an unmissable date in any Icelandic car lover's diary. This is a top spectator sport in a country which boasts more cars per head than nearly anywhere else in the world.

But Iceland has a driving ambition, to run these and every vehicle on its roads with clean hydrogen fuel. In Iceland's bubbling volcanic landscape, what once sounded like a science fiction fantasy is now taking shape. Iceland is full of natural energy and by harnessing these resources, its waterfalls and hot springs, it wants to become the world's first hydrogen economy.

Over the next 30 years, it aims to do away with polluting fossil fuels like petrol and diesel altogether and replace them with what could be the cleanest fuel on earth. These plans could reduce Iceland's greenhouse gas emissions by 50%.

To make hydrogen you need water and electricity. Iceland has plenty of water. It can also produce electricity cheaply and cleanly, hydropower from its glacial rivers and waterfalls. From its craters and crevices, huge stores of underground heat. Only 5% of geothermal power has been tapped so far. One day, Iceland thinks it could use it to provide enough green electricity to make hydrogen for itself and to export to other parts of the world.

For years Bragi Arnason was dismissed as a crank. Now they're listening. This is the model he shows to politicians visiting his labs at Reykjavik university, eager to hear how hydrogen could provide answers to global warming and the world's energy problems.

(Chemistry Department, Reykjavik University)
Our vision is that when we have transformed Iceland into a hydrogen economy, then we are completely independent of imported fossil fuel. There will be no greenhouse gas emissions from our fuel.

When water is zapped with electricity and electrolysed, it splits into oxygen and hydrogen. In Iceland they'll use geothermal and hydropower to make that clean electricity. Other countries could use power from wind or the sun. The hydrogen fuel can then be used to power an electric motor via fuel cells in a vehicle acting like a generator. The only emission is pure water.

Professor Arnason is realistic. Iceland's transformation into a hydrogen society will take time.

Professor ARNASON:
People my age will see the beginning. My children will see the transformation. And this will be the energy system when my grandchildren are grown. It's a good vision.

Icelanders won't have to wait long to board hydrogen-powered vehicles. Next spring, the first buses fuelled by hydrogen arrive on the streets of Reykjavik. They'll look like this, but equipped with their silent fuel cells, there'll be some critical differences.

(Icelandic New Energy Ltd)
Equipment will be stored in the back of the bus. The hydrogen fuel itself will be loaded on top of the bus, because if something leaks it would go out into the atmosphere. It is not harming in any way.

The buses are designed by the car company Daimler Chrysler, one of several foreign companies joining Icelandic business to steer though the big changes ahead.

Some people think we're being used as guinea pigs. But this idea was an Icelandic initiative. It's not as if the government is paying huge amounts like foreign companies to come in and use us. It's because we want to try it.

Just off Reykjavik's busiest road, the construction of Iceland's first Hydrogen filling station is about to begin. Vehicles will simply refuel in the forecourt, as in petrol stations. The plans have been finalised with one of the world's biggest oil companies putting up the money.

Why would a company like you want to be involved in this?

(Shell Hydrogen Iceland)
Because we are distributing energy. If you're distributing oil or hydrogen...

You're distributing fossil fuels, the very thing this project wants to do away with.

Yes, but then we just start distributing hydrogen. We're working with the future as well. We cannot stay behind and just die.

After buses and private cars, Iceland is looking out to sea. Iceland's fishing fleet is the country's biggest consumer of fossil fuel. Fish is its biggest export. Converting the fleet to hydrogen had seemed decades away. But the whole project is riding on such a big wave of interest from foreign companies, that the money's there to pay for the first hydrogen-powered vessel.

What still eludes the scientists is how to store enough hydrogen, especially on boats that sometimes stay at sea for weeks. The whole project's success could hang on this.

In the meantime, this boat's crew would be delighted to see the end of oil.

(Captain, "Adalborg II")
We don't like oil. It stinks. It's expensive. It's made everything dirty. So, if we can use hydrogen, it will be very nice.

On land, most Icelandic homes are already free of oil, coal and gas. Naturally heated water is piped into to their houses from huge storage tanks.

One of the big reasons that foreign investors think this is the ideal testing ground for the hydrogen project is that it's no stranger to audacious energy changeovers. 50 years ago, the country began a radical transformation of its electricity and heating systems. Now Reykjavik is entirely heated by geothermal power. Built on top of underground molten rock, the water is heated at plants like Svartsengi. In its warm overspill, surrounded by lava fields, locals come to relax in the Blue Lagoon.

Icelanders are enthusiastic about most new technology and people here seem confident the hydrogen project will work.

We have steam energy and hydrogen as well. Iceland should be proud of that.

It's important for a small nation like Iceland to try. We are optimistic people and we like to try new things.

If Icelanders can do it, everybody can do it. People will look at this small island and think, "They did it, so why not us?"

But despite its extensive use of geothermal power, Iceland produces quite high carbon dioxide emissions. It was slow to sign up to the Kyoto agreement on limiting greenhouses gases. It wanted, and got, exceptions to allow its aluminium industry to develop. The smelters here emit carbon dioxide but they also use clean hydropower. But if heavy industry and hydrogen production are competing for some of the same natural resources, environmentalists want to be sure that unsightly dams don't damage Iceland's countryside.

(Icelandic Nature Conservation Assoc.)
It's not unlimited. You have to think environmentally when it comes to hydrogen power. We really have to be consistent in minimising the environmental impact. We're going to clean energy. We want a cleaner environment.

But the country's leaders insist that hydrogen is the best solution. Iceland's President lives in a house which was once the seat of the island's Danish rulers. Now its become a symbol of Iceland's independence. The government says hydrogen would guarantee its economic independence and free Iceland from a reliance on imported oil. But President Grimsson's idea is even bigger.

(President of Iceland)
Iceland is in a way serving us the model of the society of the future. The society which is environmentally sound. Which is based on renewable energy and on a way of life which doesn't really destroy the life or the atmosphere or the bio-system that we have. There's a lot at stake. When they came to me with these ideas about four or five years ago and they there were President's of the foreign companies explained their interests I thought it was a fascinated possibility for Iceland to play a major part in the search for new forms of energy and to save for a better future for mankind.

Iceland has now begun its journey towards a future free of fossil fuels and greenhouse gases. One day it may export its new clean hydrogen. For now the rest of the world is waiting to see if this small country can show the way ahead.

This transcript was produced from the teletext subtitles that are generated live for Newsnight. It has been checked against the programme as broadcast, however Newsnight can accept no responsibility for any factual inaccuracies. We will be happy to correct serious errors.

The BBC's Shirin Wheeler
"Iceland's driving ambition is to run all its vehicles with clean hydrogen fuel"
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