( AOL Autos ) -- Not too long ago, uttering the phrase "diesel engine" was enough to elicit a wince from car buyers whose memories of previous-generation diesels often consisted of knocking engine noise, that distinctly-diesel fragrance, and plumes of blue smoke curling from the tailpipe.

Mercedes' Bluetech diesel engines are part of the new wave of "clean diesel" cars going on sale in the United States.

No more, however. Most of the new generation of diesel engines are being touted, and rightly so, as "clean diesel" power plants. They run on the ultra-low-sulfur diesel fuel that became available in the United States in October of 2006. Experts predict that diesel sales will increase by about 300 percent over the next 10 years. That's partly because diesel engines generally deliver anywhere from 20 to 40 percent better fuel economy than gasoline-powered engines, depending on the vehicle and engine size.

So, these days, diesel engines are one of the contenders in the so-called green-driving sweepstakes: the efforts of automakers to find the best solution to the problems of high-carbon fuel emissions. As more and more consumers become more environmentally conscious, the decision to go with greener fuel sources isn't just altruism, it's also good business.

According to the Clean Diesel Fuel Alliance, the use of ultra-low-sulfur fuel in the newer clean-diesel engines will result in significantly improved air quality. Annual emission reductions will be equivalent to removing the pollution from more than 90 percent of today's trucks and buses, when the current heavy-duty vehicle fleet has been completely replaced in 2030, says the organization.

One automaker at the forefront of the clean-diesel movement is Mercedes-Benz. Last year, Mercedes launched four new clean-diesel vehicles -- the ML320 CDI mid-size SUV; the R320 CDI six-passenger luxury CUV; the Mercedes E320 BLUTEC full-size luxury sedan and the GL320 CDI full-size SUV. Next summer, for the 2009 model year, Mercedes is offering BLUETEC diesel-powered versions of its popular M-, R- and GL-Class SUVs.

The E320 BLUETEC boasts 40 percent better fuel mileage than a comparable gasoline-powered model, and its EPA city/highway rating of 27/37 mpg means it can cruise more than 700 miles on a single tank of fuel, said Patrik Borenius, manager of advanced product planning for Mercedes.

With a city/highway rating of 21/28 mpg, the R320 CDI gets 32 percent better fuel economy, while the ML320 CDI sport utility (rated at 21/27 mpg) provides a 26 percent improvement. Both CDI models have a cruising range of over 600 miles before refueling.

"The new clean-diesel engines provide three key benefits," Borenius said. "It's a more fuel-efficient technology, so the customer gets better gas mileage; it offers environmental benefits by producing less carbon dioxide and greenhouse gasses, and it's one of the answers to the energy issue, in terms of reducing our dependence on foreign oil."

In April, the E320 BLUETEC was named the "2007 World Green Car" at the 2007 New York International Auto Show.

Given that Chrysler was owned by Daimler for nearly a decade, it should not come as a surprise that, during that period, Mercedes and Chrysler shared diesel technologies. So it's also not surprising that Chrysler is now working some BLUETEC magic of its own. The 2007 Dodge Ram 2500 and 2007 Dodge Ram 3500 heavy duty trucks -- powered by the Cummins 6.7-liter Turbodiesel engine -- are Chrysler's first BLUETEC Vehicles.

The Cummins 6.7-liter Turbodiesel engine also delivers better fuel economy when compared to equivalent gasoline engines, says Chrysler. And earlier this year, at the Washington Auto Show, the U.S. Environmental Protection Agency, together with the Department of Energy, tapped the new 2007 Dodge Ram Heavy Duty as the cleanest mass-production diesel-engine pickup truck on the market.

In addition to the Ram, current Chrysler clean-diesel-powered models include the Dodge Sprinter, with a 3.0-liter Common-rail Direct Injection (CDI) turbodiesel; and the Jeep Grand Cherokee , featuring a new 3.0-liter V-6 turbodiesel engine.

In Europe, diesel-powered models account for more than half of Chrysler's sales. Indeed, across the pond, diesel versions of numerous Chrysler vehicles continue to be popular, including the 2008 Chrysler 300C, Chrysler PT Cruiser, Jeep Grand Cherokee and Jeep Compass, as well as the newer 2007 Dodge Caliber and 2007 Jeep Wrangler. In fact, every Chrysler vehicle sold in Europe except the Dodge Viper offers a diesel engine as an option.

"Clearly we can't control what our customers want to buy. And we can't just put products out there, with all expense associated with developing and producing them, if we don't already think the consumer wants them," said Don Altermatt, director of diesel engines engineering for Chrysler LLC. "And right now, with all the concern about the environment, and fuel prices up over $3 a gallon again, and oil at around $100 a barrel, we are clearly hearing from our customers that they want something cleaner and more fuel-efficient. So, to that end, if this is what the customers want, and we give it to them, that's good for us, too."

Volkswagen of America is another player in the diesel sweepstakes. Presently, the VW Touareg V10 TDI, powered by a clean-diesel plant -- equipped with a standard diesel particulate filter (DPF) -- is available in 45 states. Next year it rolls out the 2009 Jetta TDI Sedan and SportWagen, which will be powered by the 2.0L Clean Diesel TDI.

"Volkswagen has a 30 year track record of diesel importation to the U.S.," said Keith Price, Volkswagen of America's public relations manager/product and technology. That track record dates back to the VW Rabbit Diesel in 1977, when VW sold a modest 12,393 units of that vehicle in the U.S.

"And moving forward, we think that the now-widely available ultra-low-sulfur diesel fuel, combined with our new clean-diesel emissions-control technology, will address the perceived or real obstacles to more U.S. drivers going diesel," Price said.

The perception issue is a real one: Many consumers are still wedded to the outdated notion that all diesel engines are dirty and noisy.

"But today's clean-diesel engines are as clean as gasoline-powered engines," says Chrysler's Altermatt. "The standards have really improved, and that's partly due to the input from the government, in terms of implementing stricter emissions standards. But we've developed diesels in a responsible manner. And in addition to now meeting those higher standards, these engines often provide the customer with engine performance that is the equivalent of gas engines, and sometimes better. And in many cases, the vehicles powered by diesel engines are more fun to drive, because they have better low-end response.

"So we do have some work to do in terms of changing old perceptions about diesels," he said. "But the more of these that come into the market, the easier it will be to help people realize that diesel is now a very clean, viable alternative to regular gasoline." E-mail to a friend

© 2009 AOL, LLC. All Rights Reserved.

All About Cars and Car Design