The Fiat 500 is to get a new 900cc two-cylinder petrol engine by the end of the year, which will bring the car’s emissions under 100g/km.

The new engine will initially appear as an 85bhp turbo, delivering CO2 emissions of 95g/km – 30% less than engines offering equal performance – and just under 70mpg.

TwinAir engines with 105bhp and 65bhp, the latter naturally aspirated, will follow in 2011.

TwinAir uses Fiat’s award-winning MultiAir technology, which more accurately controls the amount of air entering a cylinder, improving combustion. It means less emissions and fuel consumption.

Initially TwinAir cars will sell alongside other petrol variants, with Fiat anticipating they will account for 20% of all 500 sales. Pricing has yet to be confirmed, but because this is premium technology TwinAir cars won’t be the cheapest in the range.

TwinAir will also appear in the new Panda, due next year, and will form the basis of a range-extending hybrid, similar to Vauxhall’s Ampera.

Paolo Martinelli, Fiat’s vice-president of gasoline engine platforms, explained: “A compact engine linked to a 10-15kW electric motor and a limited amount of battery will provide us with the best efficiency. It’s something that we are working on, and to go into production.”

He added that a two-cylinder diesel unit was also being considered.