Scottish First Minister Alex Salmond announced up to $5.1 million would help fund a hydrogen-powered bus fleet in Aberdeen.
The project, backed by the European Union, would help position Aberdeen as one of the leading regional metropolitan centers for low-carbon technology and green energy transport, the government said.
"I believe this initiative will stimulate further innovative hydrogen technology projects and attract even more high-level investment to this city," City Council leader Barney Crockett said in a statement. "It is a crucial step toward Aberdeen becoming a world-leading, smart hydrogen city."
Since 1990, carbon dioxide emissions from Scotland declined 18 percent. The government aims to derive 100 percent of the country's electricity demand through renewable energy projects by 2020.
The first phase of the order includes 10 hydrogen-powered buses, which would emit water vapor instead of carbon monoxide. They're expected to be on the road in Aberdeen by early 2014.