Diesel-powered light vehicles will continue to grow in Europe but remain only a small part of the North American market, says Allied Business Intelligence, a technology research firm.

Blamed for the relatively low penetration in North America are the upcoming U.S. Tier 2 emissions standards, which are stricter than Europe’s EURO 4 standards, says Dan Benjamin, an ABI analyst.

“American buyers won’t be able to utilize most breakthrough diesel engine technologies developed by auto makers in Europe,” says Benjamin, adding U.S.-targeted diesel vehicles will require a diesel particulate filter (DPF), and most DPFs don’t function properly in the presence of sulfur, which will be in U.S. diesel fuel until 2006.

The cost of both the DPF and diesel engine will add upwards of $1,000 to the purchase price of a light vehicle over a comparable gasoline-powered model, he says.

Western Europe, where diesel penetration for light vehicles is 40%, will see continued growth, but ABI predicts sales in North America will be limited until the end of the decade because auto makers are waiting to see whether customers will respond to current diesel light vehicle offerings.