Last week, Nissan released more details on the diesel engine that it will introduce in America in 2010, after debuting a diesel SUV in Japan later this year. Nissan has lagged behind Toyota and Honda in hybrid production, but appears ready to join its Japanese competitors and other global automakers in the race for the next generation of mass-produced, clean-running diesel vehicles.

Nissan said its European-derived diesel will not only meet California’s minimum emissions levels—known of Tier 2 Bin 5—but that its technology could be as squeaky clean as the greenest hybrids, meaning that it will be available in all 50 states. While Nissan could offer the first diesel light-duty vehicle from a domestic manufacturer in Japan, it’s likely to trail behind Honda in its move to the United States. When the Nissan engine does migrate to the U.S. in 2010, it will be used in the Maxima sedan.

In Japan, Nissan’s M9R four-cylinder diesel engine will be used in its X-Trail SUV this fall. Derived from the Renault 2.0-liter CDI in use in Europe, the engine will meet Japan’s stringent new emissions regulations by employing piezoelectric-controlled injectors, a variable nozzle turbo, a diesel particulate filter, and NOx storage-reduction catalyst that doesn’t require urea.

Along with its low emissions, the engine is expected to deliver on the traditional diesel strong points: power and fuel efficiency. In Europe, Renault’s engine provides about 150 horsepower with 240 foot-pounds of torque—comparable to Nissan’s 3.5-liter V6—while offering 40 mpg fuel economy.

Before Nissan’s diesel Maxima reaches American showrooms, Honda will probably have a diesel available on its Acura TSX models. The company has said it will offer the engine in 2009, but it has yet to officially confirm the model that will carry it. The Honda diesel features V6-like acceleration while producing fuel economy better than its similar-sized four-cylinder engines. Toyota, Subaru and Mitsubishi have all talked about bringing diesels to their light-duty vehicles in the U.S. around 2010.

Bringing diesels to the Japanese market could be even more challenging than in the United States. Japanese perception of diesels as smoky, smelly and slow is entrenched, and according to Nissan, less than 1 percent of passenger vehicles sold in Japan are diesels. In the U.S., the percentage of diesels sold is a few points higher, but much of this difference comes from the popularity of large pickup trucks.

As gas prices maintain record-high levels, no major auto company can afford to ignore a technology that wrings more miles from a gallon of gas. Japanese automakers currently own more than 90 percent of the growing hybrid market, and they seem determined not to be left out of the diesel market either.