Adoption of the hydrogen economy (HE) is one means by which industrial economies can reduce point source CO(2) emissions. At its simplest, H(2) is generated centrally using a primary energy source to split water; the H(2) is then transmitted to end users, thereby 'carrying' energy from the central plant to, say, a motor vehicle. Assuming the primary energy input to drive the system comes from fossil fuels, carbon capture at these plants is required to reduce the specific CO(2) emissions of the system to the minimum. However, an additional thermodynamic advantage of the HE is often ignored, as it facilitates a rise in second law efficiency in the utilisation of fossil fuels. The HE can be viewed as an open-loop, chemical looping combustion (CLC) system, with H(2) as the oxygen carrier. In CLC systems, entropy recirculation leads to a reduction in the reversible reaction temperature; in the HE this results in a rise in the efficiency of both H(2) producing and H(2) consuming devices. In consequence, the second law efficiency of internal combustion engines burning H(2) is increased for a given peak cycle temperature. For fuel cells, with notionally higher thermal efficiency than internal combustion (IC) engines, the percentage gain in second law efficiency is even more pronounced. A process flow analysis allowing for likely irreversibilities shows that combining a CLC plant and a fleet of fuel cells, the overall efficiency of the system equals 40.8%, exceeding the performance of competing fuel powered technologies. (C) 2010 Professor T. Nejat Veziroglu. Published by Elsevier Ltd. All rights reserved.