The range-topping model in the Citroen C2 line-up, the VTS HDi offers a fun drive, warm hatchback performance and impressive green credentials. For most, this diesel option will be preferable over the petrol VTS but with a number of other sporty oil-burning superminis on the market, the car's excellent fuel economy and low emissions will be crucial to securing sales.

As signs of just how comprehensively the big green issue has permutated the nation's motoring consciousness go, the Citroen C2 VTS 1.6HDi is a good one. You can understand manufacturers peddling the environmental line to MPV buyers concerned over the sort of world their offspring's generation will inherit or cynical executives seeking to cultivate an eco-friendly image for themselves and their companies but boy and girl racers? Since when did the interest of the Max Power generation extend beyond vehicles with earth trembling exhaust notes and stereo systems designed for the express purpose of waking the dead? You just have to hope Citroen knows what it's doing.

Citroen may well have brought something like the C2 VTS 1.6HDi to market five years ago but whether it would have marketed the car as a "mean, green, performance machine" is doubtful. The car market, and the warm hatchback sector in particular, just wasn't very clued up on environmental issues back then. Today, we've largely collated the clues, commissioned the forensic reports and dropped the case file off with the crown prosecution service.

What modern motorists haven't been told about global warming and climate change isn't worth knowing but if you wade through all the chaff, one fact tends to stick. Now and increasingly in the future, green cars will save us money. Even the Burberry-clad tribe from your local McDonalds Drive-Thru will appreciate that one.

The environmentally-friendly warm hatchback isn't a genre that the leading manufacturers have done to death but Citroen is never shy when it comes to exploiting a convenient niche. The standard C2 VTS comes with a 1.6-litre 123bhp petrol engine but the HDi version gets a 110bhp 1.6-litre diesel. It's still fast, achieving 0-60mph in 9.4s compared to 8.3s in the petrol car, but as tends to be the case in the old petrol vs diesel debate, it's the oil-burner's torque that delivers a killer blow.

"A mean, green, performance machine?"

If you've tried the petrol C2 VTS, you'll know that it's a buzzy little thing that really needs to be revved hard if it's to give up its best performance. 6,500rpm yields the peak power output and at that engine speed, you almost expect to see a council official in hot pursuit clutching a noise abetment order. The VTS is ideal for its target market in many respects - a fun little car that looks, sounds and feels faster than it actually is. The 1.6 HDi derivative is slower but it feels just as quick if not quicker by virtue of its 260Nm maximum torque, which is 80% more than the petrol model. It's more flexible and punchy at the speeds you're forced to do around town. Despite being a diesel, when worked hard it may actually be quieter too - aftermarket bean can exhaust notwithstanding.

The overall driving experience in the C2 VTS is immediate and enjoyable, if lacking a little in terms of finesse. The ride is firm thanks to its stiffened suspension but that helps it grip and corner with some menace. The brakes are extremely aggressive with the merest brush of the middle pedal bringing you to a screeching halt but you do get used to them. The steering could use a little more feedback and the five-speed manual gearbox is on the floppy side but in general, it's hard to argue with the amount of fun being served up for the price involved. ESP and four airbags are included, which will go some way toward setting parents' minds at rest.

The looks of the C2 certainly lend themselves to warm-hatch conversion. The curving nose and asymmetric window line are trademark features with the wheelarches bulging out from the supermini's slab sides. The VTS emphasises its sporting edge with side sills and bumpers that lower the stance as well as a subtle roof spoiler at the back. Inside, the dark plastics are of acceptable quality and the design is neat but there's nothing to get over-excited about. Space is generous for front seat passengers and less so for those in the back, while the split-opening tailgate hides a modest luggage area.

The simple ball and socket air-vents are a clever piece of design and, finished in silver, these do raise the tone in an otherwise moribund cabin. The buttons on the centre console are large, chunky and solid to the touch, as is the fat handbrake lever. Storage space is less of a strongpoint with only a seriously confined glovebox and a couple of narrow door pockets to speak of in the front and just enough room for a large holdall or similar in the boot. Rear seat accommodation seems seriously confined when you glance over your shoulder from the front but climb back there and things aren't so bad. The long base section to the seats means that two adults could be accommodated on a short journey so long as the front seats aren't in Peter Crouch mode.

The C2 VTS HDi retails for £13,895 but as always with Citroen, be on the lookout for regular cashback deals. The diesel actually comes in at £1,000 more expensive than the petrol alternative. It's undeniably a better car and with its lower running costs, most buyers will just about be able to justify the premium but it's a close run thing. As the range-topping model, the VTS HDi comes well-equipped with air-conditioning and 16" 'Cheetah' alloy wheels amongst the highlights.

Some of the alternatives to the Citroen do look appealing with Fiat's diesel Grande Punto Sporting and SEAT's comparable Ibiza both undercutting the car on price. To plump for the C2 VTS HDi over either of these larger, faster cars, you'll have to really value the C2's superior fuel economy or collect one of those Citroen cashback deals to sharpen-up that value proposition.

The green issue will be crucial to the fortunes of the C2 VTS 1.6HDi. With some serious competition in the rapid diesel supermini category, the car will rely on its exemplary emissions and fuel economy in order to gain a foothold. Fortunately, the VTS HDi is a real eco-warrior. On the combined cycle, the little Citroen chips in with a 64mpg average. Get it out on the open road and that increases to 74mpg, although a more indicative figure may be the 49mpg it achieves around town. For a small car with performance pretensions, this is impressive stuff and the 119g/km CO2 emissions figure will also do its bit your bank balance - not to mention the polar ice caps.

The absence of serious heart-stopping performance will also help make the C2 VTS HDi an affordable car to insure. That's another tick in the plus column for the younger drivers that the vehicle is pitched squarely at.

The big question where the Citroen C2 VTS 1.6HDi is concerned is as follows. Are the nation's warm hatchback buyers concerned enough about the environment to purchase a vehicle that counts fuel economy and low emissions as its key strengths? They may not be but they probably are concerned enough about saving money and in today's taxation climate, that and green considerations increasingly go hand in hand.

The C2 VTS HDi is a sporty looking and feeling hatchback with a raw urgency that makes it fun to scoot about in. Performance is reasonable and the diesel engine's low down muscle makes it a benign companion when you're not haring around like a Tasmanian Devil with attention deficit disorder. The best bits though are the 64mpg average economy and the 119g/km emissions. With the C2 VTS HDi, the green choice is also the fun, affordable choice and that has to be the best way of encouraging people to make it.