NEW YORK (CNN/Money) - A bill that would encourage sales of more diesel cars, a move staunchly supported by the auto industry but rejected by environmental groups, is expected to be introduced by U.S. Representative John Dingell, D-Mich., a newspaper reported Wednesday.

Industry executives say modern diesel engines are much cleaner and quieter than those of the 1970s and can boost fuel economy and reduce emissions in a relatively easy way, the New York Times reported.

Though that argument holds sway in Europe, where about a third of light-duty vehicles sold each year are diesels, U.S. regulations have restricted the engines. Fewer than 1 percent of new light-duty vehicles sold in the United States are diesels and Volkswagen is the only company here that offers diesel passenger cars.

A spokeswoman for Dingell, who is the longest-serving member of the House and a staunch ally of the Big Three automakers, said the goal of the proposed legislation is for widespread clean-diesel usage, according to the report.

The bill, which still is being drafted, would provide tax credits for oil companies that produce low-sulfur diesel fuel and could include auto industry incentives.

However, environmental groups oppose the spread of diesel-powered autos. One group, the Union of Concerned Scientists, is skeptical about improvements in diesel technology, the Times reported. A report being prepared by he group contends that diesels emit 40 chemical compounds that lead to various cancers, birth defects and other health problems.

Not all automakers are eager for more diesels, either.

"We do get customers at our dealerships asking for hybrids; we don't get customers asking for diesels," Ben Knight, vice president for automotive engineering at Honda R&D Americas, told the Times, referring to cars with hybrid engines that combine gasoline and electric power. "They are intrigued by the super clean, super efficient gasoline hybrid with a fuel that's available."