The UK's first permanent hydrogen bus will be launched on a popular tourist route in London today. Seven more hydrogen buses will be added to the RV1 route – which takes in Covent Garden, the Tower of London and the South Bank – by mid-2011.

The initiative, which follows a trial of three hydrogen buses in the capital between 2003 and 2007, has been described as a "stepping stone" to rolling out the technology across the country. The launch will also coincide with the opening of the UK's largest hydrogen refuelling station in Leyton, east London.

The new bus, which was designed specially for London, will begin carrying passengers tomorrow. It produces water vapour from its tailpipe and can operate for more than 18 hours without needing to refuel.

"These are the next generation of hydrogen fuel cell hybrid buses that were designed and developed based on the findings of our trial," said David Edwards, a spokesperson for Transport for London. "We will be closely assessing the performance of these buses and the new technology they use. Should the buses prove reliable and suitable for the needs of London we could consider extending the fleet."

The buses contain batteries that can store electricity generated by the hydrogen fuel cell – a device that combines hydrogen and oxygen to produce power and water as a by-product – in addition to energy generated during the braking process. As a result, they can travel much farther than the ones trialled in London as part of the EU-sponsored Cute – Cleaner Urban Transport for Europe – project in 2003. The new buses were designed by the consortium of businesses that furnished Vancouver with a fleet of 39 buses in 2009. "The main difference is that those buses were designed to withstand temperatures below -20C," said David Hart, a hydrogen fuel expert based at Imperial College who was involved in Cute.

More than 4,300 deaths are caused in London by poor air quality every year, costing around £2bn a year. The new buses will go some way towards tackling this dire problem, says Hart. "All that comes out of these buses is water vapour, so you don't get all of the nasty nitrogen oxides, sulphur oxides and particulate matter that diesel buses pump out into the air." The buses may also reduce carbon emissions – but only if the hydrogen they run on is generated using renewable electricity rather than electricity produced by burning coal, he said.

One key hurdle to rolling out the buses across the UK is cost – but Edwards is optimistic that the situation will improve soon. "This technology is currently very new, with these buses being designed to suit the London operating environment. As such, with development costs, these buses are typically more expensive than their traditional hybrid diesel counterpart. But as the technology is proven along with the environment benefits they bring, the commercial market for these buses should open up and we expect the costs to drop dramatically," he said.

London is one of a handful of cities around the world to adopt hydrogen buses. In May 2003, Madrid became the first city in the world to run a regular hydrogen bus service. Hamburg, Perth and Reykjavik quickly followed suit. Berlin's Clean Energy Partnership project, which began in 2006, aims to put 14 hydrogen buses and 40 hydrogen cars on the road by 2016. The largest hydrogen project in the world – the Hydrogen Highway – is based in California and has so far built 30 refuelling stations. In December 2009, Amsterdam also launched Nemo H2, a tour boat powered by hydrogen.