With BOC Gases supplying the fuel, BMW AG says it is talking with the Chinese government about hydrogen-powered vehicles.

$quot;We worked closely with the government, helping to form a legal framework for hydrogen vehicles, including registration and infrastructure buildup,$quot; said Karl-Heinz Schmid, president of BMW China Automotive Trading Ltd.

Yesterday the world's biggest luxury car maker unveiled its BMW Hydrogen 7 sedan in China, with an internal combustion engine capable of running on either liquid hydrogen or gasoline.

UK industrial gas maker BOC Group Plc announced plans to partner with Tongji University and Shell to build Shanghai's first hydrogen refueling station in 2005. Another one is also under construction in Beijing.

China is well up on hydrogen development, with more than 3,000 hydrogen passenger cars and 100 buses rolling onto the streets during the 2008 Beijing Olympics. Shanghai also plans to use 1,000 hydrogen-fueled taxis or buses and build 20 hydrogen refueling stations by 2010, when the Shanghai World Expo will be held.

$quot;We really think China will be a pacemaker in clean energy,$quot; said Bernd Hassenjuergen, BMW's general manager of new energy strategy China.