GM and The Gas Company, based in Hawaii, have announced an initiative that will provide hydrogen to fuel cell vehicles that the automaker plans to roll out there as soon as 2015.

The Gas Company currently converts waste products from petroleum refining into methane, hydrogen, and some liquid fuels, and pumps these gases around Oahu in a pipeline. About five percent of that gas stream is hydrogen. The new initiative will see the company install devices that can separate that hydrogen at fueling stations, and pump it into the pressurized tanks that store the gas on board GM’s vehicles. The devices cost about a quarter as much as installing a new hydrogen fueling station, the company says.

The new approach is meant to address one of the biggest challenges with hydrogen fuel cell vehicles: the lack of widespread infrastructure for refueling. In some ways, Hawaii is the ideal place to start using these vehicles widely, since you only need a couple dozen fueling stations for the whole island of Oahu. The new approach could also be environmentally friendly, especially if The Gas Company follows through with its plans to make hydrogen out of plant and animal oils, and to capture it from landfills.

In another way though, Hawaii makes less sense for hydrogen fuel cell vehicles. Hydrogen fuel cell vehicles are best suited for driving involving high loads, high speeds and long distances, continuous driving. But most people on Oahu live and work and play in an area just 5 miles long and 25 miles wide. That’s perfect for electric vehicles, which can be affordable if they only need to store enough energy to trot around a small area.

Electric vehicles can also be more energy efficient than fuel cell vehicles. It’s hard to say what’s better in this situation, but if the electricity comes from wind turbines on the island, then charging a battery and using that electricity to power a car is probably going to be more efficient than extracting, pressurizing and distributing hydrogen, which also has to be converted it into electricity in the car.