The manufacturer expects to achieve the critical fleet benchmark two years before the standard becomes compulsory, claims 'the race is on' to achieve a key advantage in the fight for custom from company car drivers.
Likely models to receive the greener engines first will be the volume ranges, such as 307, 406, C5 and Xsara.
Speaking at the Trémery engine plant, near Metz, Andrew Didlick, public relations director for Peugeot said: 'The race is on. We are all chasing that because we want to get there first. PSA is going to be Euro IV at some point next year.'
Although he could not confirm at what point, Didlick was confident that Euro IV standard HDi diesel engines would be available widely across the Peugeot and Citroen range, and not just in one or two niche models.
Euro IV engines produce less particulates, but the firm is aiming to make many of them cleaner still by fitting its Diesel Particulate Filter System. Didlick claimed the PSA group will have the 'cleanest diesels on the market.'
PSA also expects fuel economy improvements for the new engines, with a standard 2.0 HDi engine in a 406 estimated to be nearing 70mpg on the combined cycle.
An integral part of the strategy is reducing the levels of sulphur in the fuel, as it inhibits the ability of particulate traps to reduce NOx emissions, the major particulate hurdle in hitting Euro IV standards.
Last week, BP announced the launch of a Sulphur-free petrol and diesel. Didlick commented: 'We are working with the fuel suppliers on this.'
Peugeot 406 2.0 HDi 110 GLX (P11D value: £15,560 and CO2 emissions: 150g/km)
Tax charge without Euro IV engine
2003/04 18% £616.17
2004/05 19% £650.41
Total two-year tax cost: £1266.58
With Euro IV engine
2003/04 15% £513.48
2004/05 15% £513.48
Total two-year tax cost: £1026.96.