There is no catch except for the argument that BMW may not sell as many diesels otherwise, and they need to sell diesels to help their CAFE. This is conjecture, though with the lack of any other evidence, seems the most likely explanation (ie what is BMW getting out of this?).

If you are interested in a diesel anyway this is pretty damn close to a free lunch, and I'm (almost) always of the opinion there is no free lunch.

The govt credit is dead and extremely unlikely to be resurrected, given all the hybrid/diesel/electric car activity going on in the marketplace. On that subject, diesel is the only alternative fuel to date, IMO, that comes close to being a net benefit for the user, the economy, the government, and the environment.