Two-stroke diesel engines could be a promising solution for reducing carbon dioxide (CO2) emissions from light-duty vehicles. The main objective of this study was to assess the potential of two-stroke engines in achieving a substantial reduction in CO2 emissions compared to four-stroke diesel baselines. As part of this study 1-D models were developed for loop scavenged two-stroke and opposed piston two-stroke diesel engine concepts.Based on the engine models and an in-house vehicle model, projections were made for the CO2 emissions for a representative light-duty vehicle over the New European Driving Cycle and the Worldwide Harmonized Light Vehicles Test Procedure. The loop scavenged two-stroke engine had about 5-6% lower CO2 emissions over the two driving cycles compared to a state of the art four-stroke diesel engine, while the opposed piston diesel engine had about 13-15% potential benefit. Opposed piston two-stroke engines offer the potential for even higher thermal efficiency than loop scavenged two-stroke engines. The efficiency advantages of the opposed piston two-stroke engine are mainly because of lower in-cylinder heat losses due to elimination of the cylinder head and lower surface area to volume ratio.The thermal efficiency of a loop scavenged two-stroke engine can be potentially further improved by using thermal barrier materials for incylinder surfaces to minimize heat losses. Analytical studies show that integration of thermal barrier materials and two-stroke loop scavenged engine could lead to a cost effective highly efficient diesel engine. Whether the theoretical benefit translates to actual CO2 emissions reduction will have to be verified experimentally.