It might bring back images of the industrial revolution, but according to the boss of a UK startup, steam power could play a key role in reducing emissions from the automotive sector.

Clean Power Technologies (CPT) has developed a system that uses steam to harness the waste heat energy from combustion engines. The company's Clean Energy Storage and Recovery (CESAR) process captures up to 40 per cent of the 36 per cent of the total energy produced by petrol or diesel engines that is lost as exhaust heat.

Only around 27 per cent of the energy generated by a combustion engine actually goes into providing forward motion, the rest is lost in cooling, friction or exhaust heat, according to CPT. The company's chief executive and president, Abdul A. Mitha, said that rather than trying to replace the petrol engine, it made more sense to try and make it more efficient.

"I thought, why invent a new wheel? Steam has been used for hundreds of years, and petrol is well established so why not use them in combination," he said. "All the other technologies are trying to reduce oil dependency and we are the only company that is oil friendly. We are providing better efficiency, but we are also using oil or petrol. Since oil companies are here to stay for a long time, why not partner with them [rather] than be adversaries."

The CESAR technology is still under development, but effectively uses steam as an alternative method of storing otherwise wasted energy - in a similar but more efficient way than a battery. "Wasted heat is used to generate pressure in a saturated liquid," CPT explained. "This heat is then recovered in substantial part as required by allowing vapour to form and expand through a suitable auxiliary engine. Using the recovered energy in this way avoids the disadvantages of the electric battery, including its requirement for charging by additional fuel consumption in the combustion engine."

As far as carbon emissions are concerned, Mitha claimed the technology does not actually remove or scrub CO2, but does improve the overall efficiency of the vehicle and thus reduce the amount of CO2 generated. "You cannot defy the laws of physics," he said. "The internal combustion engine has to work in a certain way. What you can do is make its performance a lot more efficient. By reducing the consumption of petrol or diesel, you are also reducing the overall emissions."

The initial application of the CESAR technology will be in refrigerated trucks, where rather than using the waste exhaust heat to propel the vehicle, the energy is used to drive the truck's refrigeration unit. CPT claims that by using the technology, companies can eliminate the £5,000 a year it costs to run a refrigeration unit.

There are around 10 million refrigerated delivery vehicles in Europe and North America, according to CPT and the company has already agreed to test and analyse a sample of Safeway's refrigeration trucks. Safeway has committed to a two-year deal with CPT if the technology proves successful.

The refresh rate of trucks in the US is a lot longer than in Europe, so the company expects much of its initial business to come from retrofitting technology to existing vehicles rather than licensing its technology to vehicle manufacturers.

CPT also maintains that the extra weight from retrofitting its technology to vehicles is offset by the fact that other components can be removed such as catalytic converters. "The radiator might not exist or be half the size - one thing replaces the other and within a margin of five to 10 per cent, the weight will remain the same, and the additional cost will be pretty modest," said Mitha.

Refrigeration engines run on diesel at the moment, but the company claims that its technology also works with petrol, and even biodiesel.