Within a span of three years cars could be running on a by-product of human sewage, states report.
Car makers Toyota are backing a consortium which is investigating a process that turns sewage sludge into hydrogen for use in fuel-cell vehicles, Japan's Nikkei business daily said.
Fuel-cell vehicles are seen by many as a better zero-emissions alternative to plug-in electric vehicles because they offer greater range and don't rely on electricity grids that are often powered by coal.
But one of the main obstacles to commercialisation of fuel-cell vehicles is the process of producing hydrogen.
The traditional method, which is expensive and complicated, involves extracting it from liquefied natural gas or fossil fuels.
The consortium has said that extracting hydrogen from sewage is cheaper and more environmentally friendly than traditional methods. It claims the process cuts carbon emissions by 75 per cent, Stuff.co.nz reported.
The process involves drying out the sludge to generate methane gas. The methane is then reheated to extract a high concentration of hydrogen gas.
The consortium is aiming to commercialise the process by 2015.
A number of car makers, including Toyota, Honda, Hyundai, Nissan and Mercedes-Benz, are working on fuel-cell vehicles, although significant hurdles - including refuelling infrastructure - remain.