Mazda said the RX-8 Hydrogen RE, based on its popular RX-8 sports car, gets around these problems by running on gasoline in the absence of a hydrogen fuelling station, and using existing engine parts and production facilities to lower costs.

The car is powered by Mazda's iconic rotary engine and can switch between hydrogen and gasoline fuel with the flick of a switch. It can cruise for a maximum 100 km (62 miles) on hydrogen and 549 km (341 miles) on gasoline it said.

Fuel cell cars, meanwhile, use hydrogen to first generate electricity through a fuel cell stack for power, and require an electric motor.

A rotary engine is suitable for hydrogen fuel because the separate chambers for fuel intake, combustion and exhaust significantly reduce the danger of the fuel's backfiring compared with a conventional recipro engine.

Mazda, the world's only maker of rotary engines, said it would lease the model to Japanese oil refiner Idemitsu Kosan Co. and gas trading company Iwatani International Corp. starting in March for 420,000 yen ($3,577) a month.

It plans to lease another eight to public and private-sector customers by the end of this year.

Japan has 13 state-owned hydrogen fuelling stations, while energy-related companies such as Idemitsu and Iwatani also own their own fuelling facilities.