The Institut Français de Pétrole (IFP) is working with PSA Peugeot Citroen in a program supported by France to develop a diesel-hybrid powertrain for 2010.

PSA introduced the concept at the Paris auto show last fall in two prototypes: the Citroen C4 HDi and Peugeot 307 HDi hybrids. The cars, the size of a Ford Focus, get 69 mpg (3.4 L/100 km) and emit 90 g/km of carbon dioxide compared with the 55 mpg (4.2 L/100 km) and 104 g/km from a Toyota Prius.

The idea is that because people are willing to pay about $2,000 more for a diesel that is 20% more efficient than a gasoline engine, customers should be willing to pay another $2,000 for a car that is 20% more efficient than a diesel.

While the main challenge remains improving battery performance and reducing system cost, the IFP is working with PSA engineers on the powertrain control strategy.

“The goal is to minimize energy consumption for transportation, how to exploit fuel in the best way,” says Gaetan Monnier, director of engine research at the IFP.

“For diesels, the problem is that at full load the emissions are hard to clean up. When diesels are most efficient, they make the most NOx (oxides of nitrogen).”

PSA’s strategy is to use the electric motor to improve diesel emissions. If the electric motor boosts horsepower during hard acceleration, the engine won’t have to run at full load and will produce less NOx to clean up. During idle, the engine could run at a faster, more efficient speed to recharge the battery.

The IFP has calculated a mild hybrid with 10 kW (13.4 hp) of electric energy could cut fuel consumption in urban settings by 30%.