The US Environmental Protection Agency (EPA) has embarked upon a new international diesel retrofit project that will see a scheme in Mexico City receive funding.

Together with EMBARQ and the World Resources Institute's Centre for Transport and the Environment, the EPA has awarded grants worth more than $500,000 to promote diesel emission controls and low sulphur fuels.

The EPA says the initiative is the first international project of its kind, and will reduce emissions of particulate matter and other pollutants by as much as 90 per cent in the bus fleets where it is being targeted.

A fleet of 20 Mexico City diesel buses will be converted under the Mexico City Diesel Retrofit Project - which the EPA says will serve as a template for further projects in Thailand, Chile and India.

Aside from the US and Mexican governments, other commercial partners in the project include International Truck and Engine, Volvo and Mercedes.

Diesel vehicles typically use platinum catalysts to control harmful exhaust emissions.