(Bloomberg) -- Daimler Truck Holding AG is pushing a fringe technology as an alternative to batteries and fuel cells in the shift to zero-emission rigs. The advantage? It combusts hydrogen and would be based on the truckmaker’s well-honed diesel engines. 

The world’s biggest commercial-vehicle maker is working on a potential partnership to develop hydrogen combustion engines — a technology long targeting only niche vehicles with heavy payloads in mining, construction or agriculture. Last week, the German company said it’s ready to apply it to heavy-duty trucks once authorities classify it as zero-emission.

The move, essentially prolonging the lifespan of a technology headed for the exit, comes as incumbent truckmakers face the daunting task of developing battery trucks that require (as of yet non-existent) fast-charging points with energy needs akin to small towns, and complex fuel-cell technology. Suppliers are also jumping on the bandwagon. Germany’s Robert Bosch GmbH, the world’s biggest vehicle supplier and diesel technology leader, is working on a hydrogen engine and expects to launch a related product next year. Cummins Inc. last year showed off a hydrogen combustion concept truck at a transportation show in Hanover, Germany, and parts maker Mahle GmbH also is backing the technology.

Because hydrogen combustion is similar to the traditional gasoline engine, a shift could happen “much faster than anything else we have to do with electrification,” Michael Brecht, deputy chair of Daimler Truck’s supervisory board and the company’s top employee representative, said in an interview with Bloomberg Television. He added that any cost cuts the company is planning to bolster returns should not affect investments in new technologies that could safeguard the truckmaker’s future.

The technology has plenty of drawbacks. Hydrogen combustion engines still are using oil-based lubricants, meaning they’re not completely carbon-free when burning liquid or gaseous hydrogen. Because the process happens at very high temperatures, it may also lead to higher nitric oxide emissions and lower efficiency. There’s also limited availability of hydrogen fuel, at least in the short term. BMW tried its hand at the technology for three years in the 2000s but abandoned the push when it failed to prove viable.

While companies and academia are already working on some of the solvable downsides of hydrogen combustion, there’s one more development that speaks against using the technology on a large scale: the rapid improvement of batteries.

“In the next several years, battery truck economics will begin to undercut those of diesel ones in increasingly more duty cycles and segments, and even become competitive for long-haul duty cycles,” said BloombergNEF analyst Nikolas Soulopoulos. “If someone wanted to do hydrogen, it seems more reasonable to do fuel cells, as there is quite some technology overlap.”

All that hasn’t stopped Daimler Truck and a group of like-minded companies to lobby the European Union to consider the technology as the bloc targets to become climate-neutral by mid-century. The EU Commission earlier this year proposed more stringent emissions-reduction targets for new heavy-duty vehicles and suggested classifiying hydrogen combustion vehicles as zero-emission, with a final decision by European lawmakers and member states expected for next year.

Critics say the German focus on hydrogen combustion engines is just another attempt by companies in Europe’s biggest economy to retain traditional engines, but label them green. In March, Germany’s push to secure assurances from Brussels on e-fuels — a prohibitively expensive technology that’s virtually unavailable — almost derailed the EU’s bid to effectively ban new combustion-engine cars from 2035.

Brecht said hydrogen combustion engines could help Europe reach its emission-reduction goals faster, while safeguarding jobs that would otherwise be put at risk amid a more aggressive shift to batteries. Daimler Truck, which employs more than 100,000 workers globally, last week said it’s targeting a return of more than 12% by the end of the decade — a goal that’s expected to require cost reductions. The manufacturer also announced a €2 billion ($2.2 billion) share buyback program.

Brecht said any potential cutbacks mustn’t crimp investments in new technologies such as electric motors, autonomous driving and the newly-backed hydrogen combustion engine. 

“Precisely because we are at the beginning of the transformation, we want the company to invest more than it cuts back,” he said.

--With assistance from Wilfried Eckl-Dorna.

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