The Ward’s 10 Best Engines competition has recognized outstanding powertrain development for 16 years. This month, Ward’s examines the design philosophy behind Volkswagen’s 2.0L TDI turbodiesel.

Who says Americans don’t like diesels? Not those of us who have experienced a modern turbodiesel in a current German car or even a domestic heavy-duty pickup. Unlike oil-burners of the past, all are surprisingly civilized and no longer noisy, shaky, sooty or slow.

But with one notable exception, all new light-duty diesels in the U.S. share a bulky and expensive exhaust aftertreatment technology: selective catalyst reduction.

SCR uses urea-based fluid to help purge oxides of nitrogen (NOx) from exhaust gases to render them as squeaky-clean as gas-engine emissions to comply with today’s ultra-tough clean-air standards.

While urea systems do an excellent job, they add more complexity to already complicated emissions control systems, including fluid storage tanks that must be refilled periodically and heating systems to prevent the urea fluid from freezing.

The exception is Volkwagen AG’s lovable and affordable 2.0L TDI (turbocharged direct injection) I-4, which makes its second-straight appearance on Ward’s 10 Best Engines list. (The heavy duty 6.7L Cummins turbodiesel in the Ram pickup is another exception).

Available with either a 6-speed manual or VW’s excellent direct-shift gearbox (DSG) dual-clutch transmission in the ’10 Golf, Jetta and Jetta SportWagen TDI models, this little beauty serves up 140 eager horses, a grin-inducing 236 lb.-ft. (320 Nm) of torque and Environmental Protection Agency numbers conservatively pegged at 30/42 mpg (7.8-5.6 L/100 km) city/highway. The engine also is available in the Audi A3.

Ward’s Dealer Business Editor and 10 Best Engines judge Steve Finlay sums it up when he says the TDI “delivers gargantuan torque, fuel economy and driving pleasure for a fabulous motoring experience.”

How does VW’s 2.0L TDI I-4 meet today’s federal Tier 2/Bin 5 and California ULEV II emissions standards without SCR?

Displacement is relatively small and so are the vehicles it propels. That helps limit some emissions. Most diesel-powered vehicles sold in the U.S. are big and heavy, whether they are luxury cross/utility vehicles, heavy duty pickups or even larger commercial vehicles.

But VW Powertrain Development Executive Director Jens Hadler says small displacement does not necessarily reduce an engine’s NOx output.

“Displacement is important to fuel consumption,” Hadler says. “With bigger displacement, I will (burn more fuel). That is why for the Jetta, the optimum is a 2.0L.

“But for NOx emissions, the main issue is peak cylinder pressure. With a bigger engine, I have lower peak pressures, and that means lower NOx.”

It comes down more to advanced technology. In addition to a NOx storage catalyst, which is purged periodically by letting the engine run momentarily ultra-rich to create additional heat, the 2.0L TDI boasts several combustion-enhancing technologies that help reduce emissions while at the same time improving its smoothness, drivability and fuel economy.

The first is low-pressure exhaust gas recirculation, which combines with a conventional high-pressure system to provide EGR under virtually all conditions.

The high-pressure system routes exhaust gas from the manifold back into the intake charge, while the low-pressure system takes much cooler gases downstream from the particulate filter and dumps it into the turbocharger intake air.

“So I am able to get (efficient combustion) all over the engine map – high-speed and high load, low speed and high load, low speed and low load,” Hadler says.

Another feature is “better stability over time in terms of emissions,” says Dean Tomazic- vice president, engine performance and emissions, for powertrain engineering specialist FEV Inc.

“Unlike the EGR cooler in a high-pressure loop, a cooler in the low-pressure loop sees little or no contamination,” Tomazic says.

“Because you remove (the gas) after the DPF, it is clean, so you mitigate EGR cooler fouling. That is a big plus, because this has been one of the biggest issues in emissions compliance in the past. As you foul your EGR cooler, applying deposits on it over time, its cooling efficiency is deteriorated, which reduces the EGR effect in the cylinder.”

The other key technology that separates VW’s 2.0L TDI from other U.S. light-vehicle diesels is cylinder-pressure balance control.

This system ensures very similar combustion in all four cylinders, which improves noise, vibration and harshness as well as emissions.

The secret is a sensor in each glow plug that continuously measures cylinder pressures and communicates them to the engine control unit (ECU), which adjusts air intake, fuel injection, EGR and other variables to keep combustion events as equal as possible.

“With these signals, I can work on the injection side, on the air-intake side, on the turbocharger side and on the EGR side to do the same in every cylinder,” Hadler says. The system ensures each cylinder gets exactly the same mass of fuel, for example, and it compensates for differing diesel fuel qualities in different areas of the country.

“We are the only one that uses low-pressure EGR and the only one with cylinder-pressure balance control at the moment, but the others will follow.”

Hadler says the 2.0L TDI design priorities corresponded exactly with his team’s toughest challenges: meeting U.S. emissions without sacrificing performance or fuel economy, and delivering outstanding NVH.

“Because of the very tough (U.S.) emissions legislation, we made a very new engine with a lot of features. We worked especially hard to meet those U.S requirements and deliver what the customer wants: low fuel consumption and driving fun.”

Hadler says excellent NVH is necessary for U.S. customers to accept the engine. “That was always a problem with diesel engines before. But if you want to sell a diesel in the U.S. today, you must achieve even better NVH than in Europe.”

In fact, the combination of these technologies makes the North American version of the 2.0L TDI significantly better, for now, than the much higher-volume variants sold in Europe and elsewhere.

“We regard the U.S. application as a forerunner because it always has the toughest emissions targets,” says VW AG Powertrain Management Director Jens Andersen.

Why is it so important to meet U.S. and California emissions without SCR? Partly because there was uncertainty during its design phase about U.S. customer acceptance and how ready the infrastructure would be to support urea-based systems.

But there was also was an image factor: “It is a matter of brand positioning,” Andersen says. “We have a long history in diesel engines. We wanted to reinforce our brand image with ultra-low-emission diesel engines in the U.S., and we got very good support from our board of management.”

And there are many aspects of this little gem that still can be improved further, Hadler says.

“On the turbocharger side, the injection side, the software and analytic side, there are a lot of possibilities.”