Honda Motor Co. plans to become the first Japanese carmaker to produce passenger vehicles with low-pollution, fuel-efficient diesel engines, a report said Wednesday.

These vehicles emit 20 percent less carbon dioxide than petrol-powered ones while substantially reducing emissions of particulate matter and nitrogen oxides compared with conventional diesel cars, the Nihon Keizai Shimbun said without citing sources.

Other Japanese carmakers are also bolstering efforts in this area, signalling that diesel may become the new environmentally-friendly alternative in the automobile industry, the business newspaper said.

Although conventional diesel vehicles consume less fuel and emit less carbon dioxide than gasoline-powered cars, they do release harmful substances such as particulate matter and nitrogen oxides.

But Honda has developed a highly advanced catalyst that can cut nitrogen oxides and other emissions to levels on par with petrol vehicles.

The carmaker plans to release new diesel vehicles simultaneously in Japan and the United States in 2009, or even sooner, the paper said.

Although hybrids consume less fuel, the new cars are expected to be comparable because diesel is about 15 percent cheaper than petrol, it said.

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