Compressed air as a fuel for cars is coming to the Peugeot-Citroen range.

The company's hybrid-air technology will be in production by 2016 using its new EMP2 platform which will make its debut on the new Citroen Picasso.

Although the idea of using compressed air to power cars dates from the late 1950s, the challenge is to prepare components that haven't previously been used in mass production in the car industry, said Dr Karim Mokaddem, hybrid-air project director.

"We are working with Bosch to industrialise the process," he said.

Work on the project started two years ago and first prototypes were very efficient in city driving, but less efficient at higher speeds.

The company is now onto its fourth generation and is promising a 45 per cent fuel reduction over the equivalent petrol engine and CO2 emissions down to 69g/km.

The other bonus is that the technology is more affordable at "about half the cost of traditional hybrids," he said.

"The technology and components are not new - what's new is the way we have put it together."