Ford is retooling itself as more of a green car company with hybrids (such as the recently released Fusion) and plans for all-electric vehicles, but turbocharging its engines could have the greatest impact on reducing emissions and complying with higher CAFE standards.

After more than a year of development, Ford is now producing EcoBoost engines at a retooled plant in Ohio. The 3.5 liter V-6 offers premium V-8 performance with V-6 fuel economy. I spoke with Barb Samardzich, Ford’s vice president for Global Powertrain Engineering about the engine and Ford's sustainability strategy on Friday.

The direct-injection twin-turbocharged engine will make its debut in the 2010 Lincoln MKS, offering more torque and horsepower than a V-8 but with 20 percent better fuel economy and 15 percent reduced emissions, according to Samardzich. The fuel economy is possible because some of the fuel that would otherwise go out of the exhaust is sent back into the engine.

She wouldn't comment on the added cost that consumers would pay for the engine, but said that it would be paid back within two years through savings on gasoline.

The EcoBoost engine will also appear in the Ford Flex, and the new Taurus SHO by the end of the year, and an F-150 with EcoBoost will make its debut for the 2011 model year. Samardzich said the company will switch over other models to EcoBoost whenever the next cycle of major changes is due, which will give them time to retool their manufacturing plants. By 2013, Ford expects 90 percent of its nameplates to have an EcoBoost as the standard or optional engine. This translates to about 750,000 vehicles per year.

I asked about adding EcoBoost to their hybrid lines, and Samardzich said that it would eventually happen as they are complimentary technologies. She would not commit to a timeline, only saying that EcoBoost wouldn't appear in the company's first generation plug-in hybrids. Samardzich also said that there would be no technical problems with the engine in hybrids being turned on and off when the vehicle stops as the turbochargers will be kept sufficiently cooled.

Marketing vehicles with smaller, more fuel efficient engines and equivalent power in more performance-oriented vehicles has been tried before without much success by hybrids, such as the Nissan Altima Hybrid, Lexus hybrids, and the abandoned Honda Accord Hybrid.

When asked if EcoBoost would help Ford to meet the recently announced CAFE standards for the coming years, Samardzich said unequivocally that "EcoBoost is the foundation of our sustainability strategy moving forward." Ford will leverage hybrid motors and diesel engines to improve their fleet fuel efficiency as well.

People will look at companies that offer V-6 and V-8 equivalent vehicles with some fuel savings in one of two ways. Either that since people will continue to buy high-performance vehicles anyway, if they can get a few more mpg (the Lincoln MKS will get all of 17 mpg in the city), then great. Or, hard-line greenies will suggest that they stop making these types of vehicles and focus on improving fuel economy in the rest of their vehicles.

John Gartner is Editor in Chief of Matter Network as well as an Industry Analyst at Pike Research.