What Kohler new designs do, if true, is they accomplish ALL the tier 4 requirements WITHOUT the filtering mechanism that everyone else is using.
That's what they say. And, you're right that would be a definite competitive advantage. It sounds like it's mostly good engineering and tuning:
Kohler Offering Diesel Engine for Tier 4 Compliance
Not sure how much of a real advantage that provides Kohler. The competition can do "good engineering and tuning" also. We also don't know how it will work in the real world yet.
Guess we can all stay tuned and see what happens.