First, what's a fuel cell? Fuel cell cars use hydrogen to power an electric motor and operate much like an electric vehicle.

So what is Nissan proposing?

Nissan has announced a fuel cell - called an e-Bio Fuel Cell- that is powered by the reaction of cells that include ethanol and natural gas with oxygen. In a conventional fuel cell system, the vehicles would have to be fueled by hydrogen. But this isn't the best solution for carmakers because the infrastructure needed to deliver hydrogen to fuel cell vehicles are very expensive. Instead, Nissan wants to use ethanol or a blend of ethanol and water to produce the hydrogen needed to power its fuel cell.

Nissan's project, envisioned to be on-the-road commercially by 2020, is a first in the automotive world. 

"The e-Bio Fuel Cell utilizes hydrogen transformed from fuel via a reformer and atmospheric oxygen, with the subsequent electrochemical reaction producing electricity to power the vehicle," Nissan said.

Nissan also said that by using ethanol, its e-Bio Fuel Cell can acheive carbon neutrality unlike conventional fuel cell systems that use hydrogen because of the CO2 sequestration from corn and sugarcane.

Green Car Reports said Nissan's e-Bio Fuel Cell will also be more efficient and deliver a greater range than that of gasoline vehicles (500 miles) because of the efficiency in reforming ethanol into hydrogen. Additionally, Nissan expects the cost of the ethanol-water blend to be no higher than gasoline and per-mile running cost could eventully be as low as plug-in electric cars. 

Learn more about Nissan's e-Bio Fuel Cell here