The reason is that it uses "Lean Burn" technology, and when in that mode (very fuel efficient) it produces more smog forming pollution. Honda dropped their non-hybrid lean burn car, and I think they had to drop it from the HCH to get the SULEV-II rating. It activates during steady-state cruising when the load is low enough. I think Honda should have made the HCH clean in all states, like the Prius because a lot of the hype of Hybrids is that they pollute less... and they are the 'cleanest' company, supposedly.

2001 Prius Photos       2005 Prius Photos
1992 Mitsubishi Delica Diesel-WVO Hybrid Photos