SINDELFINGEN, GERMANY -- We are just coming down from the first of two high banks on the test track at DaimlerChrysler's proving grounds when Dr. Rudolf Maly steers the conversation to the 15 million tonnes of chicken droppings piling up each year in the United States.

"It is a very big problem," says the research director of powertrain fuels at DaimlerChrysler. "It is just waste. You cannot use it even for fertilizer. But you can use if for fuel."

The fuel is called SunDiesel and the Mercedes-Benz diesel E220 sedan I am piloting at 160 km/h under cold, grey skies has a tank full of it.

Maly points out that 15 million tonnes of chicken poop could be turned into millions of litres of SunDiesel through a complicated and new, though no longer experimental, refining process. SunDiesel, states Maly with conviction, is absolutely "the cleanest fuel available."

Compared to the best conventional diesel fuel sold under strict European regulations, SunDiesel reduces hydrocarbons by 90 per cent, carbon dioxide (CO{-2}) by 90 per cent and particulates by 30 per cent. That's good. Best of all, SunDiesel is essentially CO{-2} neutral; it does not noticably contribute to global warming as a greenhouse gas.

How? The CO{-2} generated during engine combustion was originally extracted from the atmosphere when the source biomass -- plants -- was growing. SunDiesel could easily be synthesized from chicken waste, which as biomass is essentially digested feed grain. And SunDiesel doesn't stink like a barnyard, nor does it have that oily stench that fills your nostrils at truck stops, either. When we take a break on the track, I pop the lid on the fuel tank and take a long, deep sniff. Smells mildly like paint thinner,

"This is a designer fuel," says Maly, who can't mask his excitement about the propects for SunDiesel, a joint venture between DaimlerChrysler and Volkswagen. "It's a synthetic we can create from waste. We can use that waste. And the best thing is it can be mixed in any proportions with our standard, our normal, diesel fuel. So this gives us a chance for transition to cleaner fuels."

It apparently does not hinder performance, either. Back on the track, in his excellent but German-accented English, Maly encourages me to push our E-class hard. So I do, despite the drizzle that has turned the track into a bit of skating rink. We are, after all, on a closed circuit with steep banks through the S-turns.

The car is car quick enough, with a 0-100 km/h time in the nine to 10-second range. At high speeds it is even better, much like any E-class running down the autobahn with an old-fashioned, stink-pot diesel under the hood.

"The main argument is there is a lot of waste available and what are we to do with it," says Maly. "Well, we can turn it into SunDiesel."

Alas, SunDiesel is sold out of just one DaimlerChrysler research filling station in Stuttgart, where the company has its bluish-grey, military-style research centre located not far from the slightly more posh corporate headquarters with the spinning three-pointed star on the roof. For now SunDiesel is produced by one company, Choren, at a facility in Freiberg near Dresden.

"But two others are setting up demonstration projects," Maly says, declining to name names.

More players should help to bring the manufacturing costs down. Right now SunDiesel is up to three times more expensive to make than conventional fuels and only small quantities are available for research studies. But if you could buy it here at the pump, a litre of SunDiesel would cost slightly less than a litre of conventional diesel because bio-fuels are tax-free in Germany.

Synthetic fuels like SunDiesel are free of sulphur and other impurities, so they burn more cleanly and efficiently than the diesel fuel on sale right now in Canada and the United States. Even better, SunDiesel is used in a diesel engine, which is itself about 20 per cent more fuel efficient than a gasoline one.

"This [SunDiesel] gives us a chance for a transition to other fuels and energy systems. In Europe we are much more concerned about the environment than they are in the United States, so that is why there is so much interest here," says Maly.

Truth is, I'm here because I'm interested in SunDiesel and other environmental initiatives at work in DaimlerChrysler. In all, about 200 journalists and academics have been invited to the company's technical centre for a two-day "Innovations Symposium."

That means we've agreed to suffer through one day in a domed auditorium listening to academic papers mostly focused on alternative fuel and environmental initiatives at DaimlerChrysler. As a reward, we get a second day at the track to drive future cars and trucks.

I am willing to endure a day locked in a darkened, airless room listening to presentations with titles like "Opportunities of Alternative Fuels and Alternative Propulsion to Reduce CO{-2} Emissions in Medium Terms" and "Reliable Onboard Electrics as a Categorical Imperative" -- if I get to drive SunDiesel cars and fuel cell prototypes the next day.

Through it all, when it comes to the environment, DaimlerChrysler clearly is betting heavily on diesel technology. It is a recognized core strength of the company. Diesels are important in Europe, where according to DaimlerChrysler research head Thomas Weber, 44 per cent of new-car buyers go for diesel.

The company is less enthusiastic about fuel-efficient, gasoline-electric hybrids like the hot-selling Toyota Prius. Weber and other board members such as Dieter Zetsche, who heads up the Chrysler group in North America, think hybrids are too expensive (by about $5,000 or more), too complicated, not very pleasant to drive, and they burden owners with unproven durability and reliability. They are also less fuel-efficient than diesels in all-around driving.

"Plus," says Zetsche, "there are open questions about resale values and battery replacement costs -- issues that will, no doubt, be very important to the customer."

Of course the negative view of hybrids could have something to do with the fact DaimlerChrysler won't offer buyers a hybrid for at least another 18 months. This despite the obvious success of the Prius and the growing presence of rival manufacturers like Ford.

Still, DaimlerChrysler is not completely out of the hybrid loop. Earlier this year at the Detroit auto show the company showed a hybrid diesel-electric S-Class sedan as an alternative to gasoline-electric hybrids.

But Weber and others argue that hybrids are most efficient in city driving, where there is lots of stop-and-go driving and distances are short. "The diesel comes into its own on long-distance trips."

Long-term, Zetsche, Weber and their colleagues at the symposium were absolutely clear about fuel cell technology being "the automotive industry's ultimate drive system." But the most optimistic experts don't believe fuel-cell vehicles will be available for the public to buy for at least another decade.

So between now and then, the car business needs to come up with more efficient powertrains (engine/transmission systems) that greatly reduce emissions and offer serious improvements in fuel economy.

Driving examples of the "green" steps DaimlerChrysler and others in the auto industry are taking were ready for us to drive on day two at the test track. At the far range of the spectrum we had two zero-emission A-glass Mercedes-Benz four-door hatchbacks powered by Ballard fuel cells imported from Vancouver. We also had a variety of diesel offerings, including the SunDiesel E-class.

Then there was a surprise. The big, rear-drive Chrysler 300C sedan with its throaty 300-horsepower Hemi V-8 has a fuel-saving technology called MDS (Multi-Displacement System) that Zetsche boasts will save more fuel in 2004 than all the Honda Civic and Toyota Prius hybrids driving North American roads combined.

MDS, which is very much like the Displacement on Demand system General Motors will offer in the coming months, uses electronic engine controls to cut the number of running cylinders from eight to four in just 40 milliseconds. This reduces fuel consumption when eight-cylinder power isn't needed.

"MDS improves fuel economy by up to 20 per cent, with a corresponding reduction in greenhouse gas emissions, and without the customer sacrificing power or performance," says Zetsche.

He estimates that with 60,000 Hemi MDS engines in production this year, if they drive an average of 15,000 miles annually, 6.1 million gallons of gas will be saved.

"In 2004, we estimate that the combination of Honda Civic and Toyota Prius hybrids will conserve approximately 4.8 million gallons of fuel," he says with a smile barely hidden by this thick handlebar mustache.

Of course driving a 300C like I did on the track will skew Zetsche's numbers in the wrong direction. All that power was just too tempting and I had to air it out. But electronic controls can do wonders for fuel economy if drivers co-operate a little bit.

And the apparently ultimate in green driving, the fuel cell car? Dr. Klaus Bonhoff, let me take his A-class with the latest Ballard 65-kilowatt fuel cell stack (the 9002 model) for a spin and it proved surprisingly drivable: 0-100 km/h in 15 seconds, and a very comfortable cruising speed of 120 km/h. DaimlerChrysler is putting 60 of these into service with various customers, some as far-flung as Singapore and Australia.

"There is no reason why fuel cells shouldn't happen," says Bonhoff. "Yes, we still have some things to work on -- cost, reliability, durability, meeting [government] regulations -- but we can do these things. Fuel cells have to happen; we believe that."

Obviously for me, the SunDiesel car was the most fun because it promises to clean up barnyards everywhere, not to mention the atmosphere in general, all without demanding any driving sacrifices. But the price of making SunDiesel has to come down. And then there are the oil companies. I can't see big oil liking it very much and that could be a problem.

For now, the oil companies are not in on any of the SunDiesel action, so they have nothing to gain and customers to lose. Will they allow SunDiesel pumps to stand next to their own conventional gas and diesel pumps at filling stations?

DaimlerChrysler and other big players in the car business have the capability to churn out clean vehicles with loads of boy-racer performance. They can build them right now. They just need more encouragement from buyers and more co-operation from governments and other industry players such as the oil companies.

Who knows about big oil, but I suggest everyone else take a spin in a SunDiesel E-class with Maly riding shotgun. He has a good yarn to tell and the track driving is a hoot, too.