I think that Steve W is closest to the truth/reality.
VW 2.0L TDI diesel emission systems use a NOx trap in the exhaust separate from any other catalysts.
See:
and
en.wikipedia.org/wiki/NOx_adsorber
In use, the NOx adsorber acts like a catalytic converter and does consume s ome diesel fuel to aid in the NOx reduction reaction. How they inject the fuel into the adsorber is still somewhat unclear to me. It appears that al l they do when the said vehicle is being emission tested on the treadmill i s activate the fuel supply to the adsorber and, shazamm, it starts working . The NOx emissions drop substantially. When/if the OBD2 test plug is remo ved (after testing) the ECU senses that and cuts the fuel supply to the ad sorber. Now the vehicle is back in "road mode." Thats why the fuel consum ption gets significantly better. (about 50 mpg compared to 43) Unlike gas engines, most diesels are lean burn rather than stoichiometric.
VW got busted when some researchers simply did a road test using a portable exhaust gas analyzer rather than an "official" EPA/CARB emission test mach ine. The car didn't KNOW it was being tested. The road test numbers didn' t jive with the certified emission test numbers. It all went downhill (qui ckly) from there. How could VW be so stupid as to think this wouldn't ever happen?