As part of an Innovation Workshop demonstration, Volkswagen showed off a 2.0-liter TDI engine rated at 268 horsepower.

Think about those numbers for a second. The highly-touted 3.0-liter Ram EcoDiesel is rated at just 240 horsepower with 420 lb-ft peak torque. That means the the VW TDI has a power density of 134 horsepower per liter, or around 2.2 horsepower per cubic inch.

VW also has a 236-horsepower 2.0-liter TDI that’s in the new Passat.

VW certainly has a way with diesel engines. Just think of the Audi V12 TDI with 493 horsepower and 738 lb-ft. The automaker didn’t disclose the torque rating for this new oil burner, but 400 to 450 lb-ft isn’t a bad bet.

According to VW and various published reports, the 2.0-liter TDI sports twin turbos along with an electric supercharger to eliminate turbo lag and boost throttle response. Other tricks include variable valve timing and a piezo common-rail injection system operating at up to 2,500 bar, or more than 36,000 psi. Another unique feature is a start-stop operation that shuts down the engine when the speed is below 7 km/h. It can also shut off at higher speeds when the driver lifts completely off the throttle.

Another announcement during the event was a 10-speed dual-clutch direct-shift gearbox (DSG). It’s rated up to 550 Nm of torque, or 406 lb-ft, so it could be suitable for the upgraded 2.0-liter TDI. It’s rather evident that Volkswagen is advancing diesel technology at a rather quick pace to keep up with other fuel-saving measures.