Comment by Hnedelin

This was official EU policy, based on french reports, as the french and italian manufacturers actually came up with common rail diesels first. The EU then changed regulations to tax based on CO2, which diesels are better at. They also made diesel taxes lower, to offset the higher prices for diesel cars (often 2000+ euros more than the petrol versions). This was all done in the framework of reducing foreign oil imports.

What VW did was to save money from ThinkBlue systems. Not every manufacturer failed the tests, especially the ones who used exhaust gas treatment did pass, and were more economical than petrol engines. After that, the EU changed emission standards and made them more strict, so VW switched to using dual exhaust treatment. Which made the cars more expensive.

What finally killed diesels was the removal of the tax reduction on diesel fuel. Since it is now taxed the same as petrol, there is no more any advantage that can offset the higher purchasing costs of the cars.