With a plethora of technologies under development, it seems that everyone has a different opinion about where the future of fuel lies.

The one common factor is that most people in the automotive industry accept that the days of the good old petrol-powered internal combustion engine are numbered.

The 'green machine' is now in full swing with alternative fuels – specifically hydrogen and fuel cells – accepted as the future. The September 11 atrocities in America have intensified development work as the West looks to reduce dependency on crude oil as worries persist over potential Middle East unrest.

Many manufacturers have pledged to have alternative fuel vehicles making up almost 25% of their global sales with 10 years – brave, but expensive promises. Such is the race to be first that companies are ploughing vast sums into their laboratories.

Ford has already invested £290m to buy its way into the DaimlerChrysler/Ballard fuel-cell partnership. But that is just the tip of the iceberg. Many more millions will be spent before a Ford-badged fuel cell vehicle goes on sale. DaimlerChrysler expects to invest £1.5bn developing fuel cells to enable it to slash CO2 emissions. The first systems have already been seen in the A-class.

The development of new fuel technologies is largely shrouded in mystery – few carmakers are willing to disclose secrets that might give their competitors an advantage. Step in Michelin. The world's largest tyre manufacturer has established the ideal 'environment' for carmakers to exhibit their latest technologies with its third Challenge Bibendum held in California, the most pollutant-conscious state in the world.

Billed as “an independent, real-world demonstration of the car industry's commitment to progress in the development of environmentally innovative vehicles”, Challenge Bibendum attracted leading manufacturers and independent enthusiasts.

Most of the Californian Fuel Cell Partnership (CaFCP) attended, including Hyundai, General Motors, Mercedes-Benz, Toyota and Honda. A selection of bio-fuel diesel alternatives, ethanol, methanol, natural gas, petrol/electric and battery/ electric hybrids were among the 28 production and 17 prototype vehicles.

CaFCP chief executive Catherine Lentz said Challenge Bibendum was the largest gathering in the world of alternative fuel-powered vehicles.

“This shows the world that the leading manufacturers are all working towards making the fuel cell a commercial viability,” she said.

“The work which is being carried out will ensure that, within the next few years, it will become reality.” But she had words of caution for the expectant public.

“Progress has not, and will not, come easy and we as an industry must caution the public to be patient. It will take some time to come up with the perfect solutions. Fuel cells are still in their infancy, but they are the way of the future.”

The biggest hurdle remains in deciding which technology should power the fuel cell. Hydrogen remains the most likely, and is already in use today, but the inherent difficulties of storage and limited range are enduring problems.

The two Japanese manufacturers, Toyota and Honda, lead the way in hydrogen fuel cell technology. Honda's FCX-V3 is the type of squat economy vehicle normally associated with alternative fuel vehicles, while Toyota used the technology in a Land Rover Discovery-sized five-seat off-roader called the Highlander.

Fuelled by gaseous hydrogen stored in four tanks at 3,500psi and using Toyota's 121bhp (90kW) fuel cell stack, the Highlander can reach 90mph but is restricted to a range of 155 miles.

The vehicle also employs the modified nickel-metal-hydride battery and DC/AC inverter pack from the Prius petrol/electric hybrid to store regenerated electricity.

While the Highlander is the world's largest fuel cell vehicle, apart from buses on trial in European cities, it is so heavy that Toyota would not reveal its weight.

Honda's FCX-V3 seats four adults, at a squeeze, and is fuelled by 100 litres of gaseous hydrogen stored at the same psi as the Toyota. It is capable of covering 112 miles with a top speed of 81mph.

At 1.8 tons, the FCX-V3 is a heavy beast, but certainly far lighter than the Toyota. And the weight issue was a point addressed by Honda chief engineer Yozo Kami.

“Already we have made improvements with the FCX-V4 which weighs 1.7 tons and has a 187-mile range, but we must continue to tackle the problems,” he said. “We must make the fuel cell stack more compact and the hydrogen pressure tanks must get smaller.”

But in the short-term, it is the hydrogen internal combustion engine that will make its way to showrooms ahead of the fuel cell alternatives. And at the head of the field are Ford and BMW.

Ford presented the P2000, essentially a lightweight aluminium-alloy Mondeo, which rattled from standstill to 60mph in 16 seconds, four-seconds slower than the standard petrol car. With a range of about 170 miles, the P2000 carries five Dynetek-made tanks in the back weighing 200lbs and holding 178 litres of gaseous hydrogen.

Most eyes were on the BMW 7 Series V12 which, though not taking part officially in the Michelin Challenge Bibendum, showed how close hydrogen-powered cars are to entering the market.

Running on 26.4 gallons of liquid hydrogen stored at minus 250 degrees C, the dual-fuelled petrol/ hydrogen 7 Series has a hydrogen-only range of 200 miles. This is one of the problems facing hydrogen – there are, for example, only two special liquid hydrogen stations in Germany.

BMW senior engineer Thomas Dietsch predicted the car would be on sale within three to four years.

“The technology is moving on quickly now and I am confident that by 2010 we will have a specialised hydrogen-only small car on sale and that by 2020 25% of our cars will be running on hydrogen,” he said.

The three-day event, which ran from Los Angeles to Las Vegas, saw the cars tested for acceleration, braking, noise, handling, range and efficiency.

Honda finished in top spot after collecting 11 gold and 16 silver awards.

Edouard Michelin, president of the tyre firm, said: “Michelin Challenge Bibendum is rapidly becoming the Olympic Games for alternative fuels. Five years from now we will look back and realise how quickly, in relative terms, the technology has developed.

“The world is fast running out of fossil fuels and the automotive industry must address the issue now, before it is too late. Michelin will do everything we can to fuel the new alternative.”