Japanese industrial giant Mitsubishi has announced it is to invest some $14 million to produce commercially viable, clean fuel-production systems at its new spinoff firm based in Vancouver.

The plant, known as H3 Energy, will be based on campus at the research park of the University of British Columbia where work will be carried out to develop Mitsubishi's patented technology that produces high-pressure hydrogen gas from water electrolysis without a compressor.

According to H3 president Ken Tojima, plans to expand the number of partners involved in the venture to incorporate others working in the fuel cell industry could see the creation of a commercial unit available within the year.

The British Columbian government extended a warm welcome to Mitsubishi's investment, which represents the involvement of yet another major international automotive player in an increasing cluster of hydrogen-fuel technology companies, led by fuel-cell developer Ballard Power Systems Ltd.

"Mitsubishi's choice to locate its hydrogen-production equipment business in B.C. demonstrates that our local industry is at the vanguard of developing high-efficiency hydrogen technologies,' said Energy Minister Richard Neufeld.

The commercialisation of the industry has been gathering momentum recently, with Honda winning approval from the United States Environmental Protection Agency (EPA) and the California Air Resources Board (CARB) for its commercial fuel cell vehicle last month.

Meanwhile, Toronto-based Hydrogenics has signed a vehicle research and development contract with John Deere to work on commercial fuel cell vehicles.