The on-going requirements for reduction of fossil fuels consumption, harmful emissions, and noise in the cities enforced the development of city buses using alternative propulsion systems as a potential answer to these requirements. Even though some improvements, as regards harmfull effects upon environment, have been accomplished by Euro VI diesel engines, no significant developments in this direction can be expected. For this reason transition to electric propulsion systems of city buses having zero emissions, such as batteries or fuel cells buses (FCBs), is imperative for many cities and city operators. The paper presents an analysis of the development of FC buses accomplished by several European projects and points at numerous problems and obstacles that have to be overcome in order to make this technology commercially sustainable. Special attention has been paid to the comparative analysis of FC buses and buses using other propulsion technologies as regards both, fuel economy and operational costs.