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Diesel engine exhausts commonly contain a high level of surplus oxygen and a significant amount of thermal energy. In this study the authors have theoretically investigated a way of utilizing the thermal energy and the surplus oxygen of exhaust gases to produce gaseous fuel in a rich combustor placed in an exhaust gas recirculation (EGR) loop. In the rich combustor, a small amount of diesel fuel will be catalytically reformed on a palladium/platinum based catalyst to produce hydrogen and carbon monoxide. Since the catalytic EGR reformer is incorporated in the EGR loop, it enables the partial recovery of exhaust heat. The gaseous fuel produced in the rich combustor can be brought back into the engine in a pre-mixed condition, potentially reducing soot formation. The preliminary energy efficiency analysis has been performed by using CHEMKIN and an in-house engine simulation software SAES.