In this paper, we attempt to measure the environmental benefits of hydrogen deployment in the transportation sector. We compare the hydrogen pathways to the conventional transportation fuel cycles in terms of external costs, estimated using the results of the most accurate methodologies available in this field The central values of performed analysis bring us ambiguous results The external cost of the best conventional solution ("oil to diesel hybrid internal-combustion engine") in some cases is just higher and in others just lower than that of the best fossil fuel to hydrogen solution ("natural gas to hydrogen fuel cell") Nevertheless, by accounting for the uncertainty about external costs. we are able to remove this ambiguity highlighting that the hydrogen pathway provides significant environmental benefits,especially in densely populated areas, assuming 100% city driving. (c) 2009 Elsevier Ltd. All rights reserved.