75mpg diesel hybrid on the way

• Peugeot-Citroen diesel hybrid within five years
• 75mpg and low carbon dioxide emissions
• Technology costs £3000 more than standard cars

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Citroen and Peugeot diesel hybrids offering more than 75mpg and low carbon emissions could be on the market within five years.

PSA Peugeot-Citroen today unveiled the results of their Efficient-C research project, a hybrid diesel Citroen Berlingo that emits just 99g/km of C02, enough to put it into the new band of Vehicle Excise Duty (VED - road tax), and delivers 76mpg.

The new technology represents a 30% improvement in fuel economy and emissions compared with the equivalent diesel.

The idea is to meet the UK government's ultra-low carbon car challenge, which encourages companies to produce a five-door small family car that emits less than 100g/km.

There is a catch, however. The estimated additional cost of the technology is currently £3000 over the conventional diesel, but PSA is hoping to reduce this so that their hybrids will cost £1500 more when they eventually go on sale in 2010.

Steve Gooding from the Department for Transport said: 'More efficient and cleaner cars are high on the Government's agenda. We want to work with the industry so it can develop technology to bring more efficient vehicles to the showrooms.

'We also have to do our bit to inform customers about the benefits of fuel-efficient vehicles.'

While the PSA project received funding from the DfT, it is thought that the Government will no longer offer grants to motorists buying greener cars. Despite receiving the blessing of the European Commission, insiders say new grant programmes worth around £24 million may never be offered.