VOLVO is taking a giant step towards the next generation of electric car technology.

Backed by research support from the Swedish Energy Agency the company is aiming to develop a fuel cell that can extend the electric car's operating range without any carbon dioxide emissions.

And the aim is to have two prototypes based on the Volvo C30 DRIVe Electric ready for testing in everyday traffic from 2012.

A preliminary study is being conducted into what is known as a Range Extender, which consists of a fuel cell with a reformer.

The task of the reformer is to break down petrol and create hydrogen gas, which is converted into electrical energy to power the car's electric motor.

"This is an exciting expansion of our focus on electrification," says Volvo president Stefan Jacoby. "Battery cost and size means that all-electric cars still have a relatively limited operating range.

"Fuel cells may be one way of extending the distance these cars can cover before they need to be recharged. What's more, the project gives us increased knowledge about fuel cells and hydrogen gas."

The technology is expected to increase the electric car's operating range by up to 250 kilometres - in addition to the range provided by the car's battery pack.

The fuel cell industry expects that the cost efficiency will improve continuously through refined technology and large scale production.