Business Communications Company's Fuel Cell Industry Review provides a comprehensive look at the fuel cell and hydrogen infrastructure markets that were supported by more than $1.1 billion in government spending worldwide in 2003. That number is expected to exceed $1.5 billion in 2004. The review covers companies manufacturing proton exchange membrane (PEM), solid oxide, molten carbonate, and phosphoric acid fuel cells. It also covers patents and research developments for those fuel cell chemistries as well as novel fuel cells. It also covers developments in stationary, portable and vehicle markets.

Many more companies entered into the fuel cell market in 2003 bringing the total worldwide to more than 1,000 companies and institutions involved in some way or another in producing and improving fuel cell components and systems. Many new companies provide components for the stack as well as balance of plant and hydrogen supply components and systems.

Perhaps the most significant event was the signing of the Terms of Reference, formally creating the International Partnership for the Hydrogen Economy (IPHE), which is an international mechanism coordinating hydrogen research and hydrogen technology development and deployment. The Terms were signed by representatives from Australia, Brazil, Canada, China, European Commission (EC), France, Germany, Iceland, India, Italy, Japan, Korea, Norway, Russia, UK and the U.S.

Furthermore the world's leading fuel cell organizations have entered into a cooperative agreement to advance commercialization of fuel cells worldwide through technical cooperation, information exchange, advocacy, harmonized product specifications and safety standards.

Expected mass production costs fell by close to 20% as innovations continue in the industry. U.S. fuel cell related patents were granted in excess of 50 months in 2003 and that trend is not expected to slow in 2004.

A survey by Fuel Cell Today reported 2,800 fuel cell systems were produced in 2003. Nearly 7,000 such units have been operating worldwide. Increasing fuel cell investment will not only impact energy security and air quality; it could yield nearly 200,000 new jobs in the next 20 years according to Breakthrough Technologies Institute.

The U.S. Fuel Cell Council reported sales of fuel cell products, parts, and services in the U.S. -- for members participating in this survey -- of $151 million and $167 million for 2001 and 2002 respectively, representing an 11% increase between the two years. Applying the same 11% to 2003 and 2004 would yield sales and services of $178 million and $196 million respectively.

Reported fuel cell related R&D expenditures for 2001 and 2002 were $248 million and $288 million respectively, representing a 16% increase between the two years. R&D expenditures in 2003 equal $334 million and may reach $387 million in 2004. Employees, the reported number of people conducting fuel cell related work for 2001 and 2002 were 2,745 and 3,273 respectively, representing an increase of 19% over 2001 levels. A 15% increase in 2003 brought that number to 3,763 and another 15% increase in 2004 will bring the level of fuel cell employment to 4,327.

An increase in U.S., European, and Japanese research and demonstration spending more than doubled in 2003 to $780 million and that number is expected to continue to increase. President George Bush has committed to increase funding for hydrogen energy projects and fuel cell development over the next few years. The president's FreedomCAR and Hydrogen Infrastructure budget called for about $273 million in 2003; Congress has appropriated even more money. Plus within the DOE budget -- as revealed in H.R. 6, the House bill that extends funding -- about $602 million will be available in 2004, up from $485 million in 2003. This bill is currently pending before the U.S. Senate.

When other nations such as Korea, Australia, China and Canada are added to the mix as well as spending by individual states in the U.S., that number swells to more than one billion dollars available for fuel cell projects in 2003 and 2004.

The European Union (EU) plans to spend $3.4 billion on hydrogen projects from 2005 through 2015. The two main programs in this project are: Hydrogen program, which aims to fund a large-scale test facility for production of hydrogen and electricity. Hycom will be funded with $1.61 billion.

Corporate Japan is aggressively pursuing the commercial development of portable, stationary and vehicular fuel cells and the Japanese government is adding more than $250 a year in subsidies. The stationary Japanese market for fuel cells is expected to grow to about $2.4 billion by 2010 with $1.5 billion in the residential market and $920 million in the commercial business market. By 2010 fuel cell co-generators could replace about one third of 1.2 million gas-fired water heaters sold annually.