Problem with ceramic engines is that you have less control over heat escape. Heat escape can actually be a good thing if it can be controlled. If it is running on pure oxygen then not a problem from an emissions viewpoint. The www.splitpowerengine.com controls heat escape. http://www.corporationofflight.com/splitpowerengine/enginecompare/enginecompare.html shows how even not factoring in the effects of heat escape that the power angle is what really reduces power in the Wankel rotary engine.
Yes you can get more power from a hotter burning engine but if the engine burns to hot then nitrogen oxides form. Nitrogen is 78% of air by volume and helps to "soften the knock". Nitrogen oxides react with sunlight and other chemicals to form smog. Nitrogen oxides and sulfur dioxide react with substances in the atmosphere to form acid rain.
Short-term: Breathing nitrogen oxides can cause: Irritation of the respiratory system, eyes, and skin Aggravation of respiratory diseases, particularly asthma Coughing and choking Nausea Headache Abdominal pain Difficulty breathing Skin and eye contact with nitrogen oxide gases or liquid nitrogen dioxide can cause irritation and burns.
Long-term: Long-term exposure to nitrogen dioxide can cause: Asthma Respiratory infections
Although the www.splitpowerengine.com docs show that heat transmission and reducing coatings can be inside the combustion chamber, another way to control heat loss is to add heat from the exhaust. Heat transmission is only from hotter to cooler. So making the outside of the chamber hotter with waste heat will slow heat transmission. Environmental laws will continue to crack down on emissions.
This site shows heat transmission of ceramics relative to steel. https://global.kyocera.com/fcworld/charact/heat/thermalcond.html whereas zirconia has a thermal conductivity at room temperature of 3 watts per meter kelvin, carbon steel has 41 or 41/3 = 13.6x as much heat flow.
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