DETROIT — Struggling to reduce its costly dependence on palladium, platinum and rhodium, the Honda Motor Co. plans to begin using a new kind of catalytic converter technology that the company contends will cut its use of these precious metals by 50 percent to 70 percent without increasing air pollution.
Catalytic Solutions Inc., a privately held company that invented the technology and is based in Oxnard, Calif., said it was in talks to sell the technology to other automakers as well, a move that could drive down the price of palladium in particular. Palladium is mainly used in catalytic converters and some laptop computer components, and its price has risen ninefold in the last five years, to $967.65 a troy ounce, on fears that supplies would prove inadequate for the needs of the auto and electronics industries.
Catalytic converters are part of the exhaust systems of automobiles. They turn smog-causing nitrogen oxides, carbon monoxide and unburned fuel vapor into less harmful carbon dioxide and other gases. Automakers around the world have been installing ever more precious metals in catalytic converters to meet increasingly stringent emissions regulations in the United States, Europe and Japan.
Palladium prices have soared as Russia has restricted exports and as automakers have started trying to make the huge engines in sport utility vehicles and other light trucks pollute as little as cars, usually by fitting them with much bigger catalytic converters. Palladium prices briefly approached $1,100 in early February during an interruption of Russian shipments, which drew speculators into the market.
Honda's first vehicle with the new catalytic converter, a small minivan called the Honda Stepwgn, will go on sale next month in Japan. Honda plans to install the technology in coming years on a wide range of vehicles that it sells in industrialized nations with tight emissions controls, but is still working out the timetable, said Andy Boyd, a Honda spokesman.
The crucial question facing Honda and other automakers is whether the new catalytic converter technology will be as effective in reducing emissions and as durable as Catalytic Solutions promises. Catalytic Solutions says it has mastered a technique that other companies have tried, only to encounter problems with performance and durability.
Introducing the technology in Japan, before setting a timetable for its introduction in the United States, offers several advantages for Honda. Japanese emissions standards are less stringent than those in the United States, so Honda can design the new catalytic converter to meet American standards and still allow a margin of error for meeting Japanese standards. Gasoline in Japan also has less sulfur and less variation in quality than American gasoline; sulfur and quality variations in gasoline hurt the performance of catalytic converters.
Finally, recalls in Japan tend to be less controversial than in the United States. The Environmental Protection Agency has periodically ordered large-scale recalls of models that consistently fail to meet emissions standards after 50,000 miles, and Honda has cultivated a low-pollution image in the United States that it is loath to put at risk.
Catalytic converters now on the market contain a honeycomb coated with precious metals that catalyze, or trigger, chemical reactions in the exhaust gases that flow by. Catalytic Solutions developed a new honeycomb coating that is a mixture of precious metals and so-called mixed-metal oxides, instead of relying entirely on precious metals.
Mixed-metal oxides are made from obscure but mostly inexpensive elements, like transition metals and lanthanides. The problem has been that these crystalline compounds come apart in the 1,400-degree heat of a catalytic converter mounted under the floor of an automobile. And automakers have been moving catalytic converters to put them right next to the engines, where they are more effective in removing pollution but where the exhaust gases are even hotter, reaching 1,650 degrees Fahrenheit.
Catalytic Solutions is convinced that its honeycomb coating will solve the problem, said Kristina Calkins, a company spokeswoman. Indeed, Honda plans to mount the new catalytic converters right next to the engine in the Stepwgn.
"It can handle extreme conditions," Calkins said.
The Catalytic Solutions product would be even more effective than current catalytic converters if it used more precious metals, she said. But the converters have been designed to use the minimum of precious metals necessary to meet automakers' engineering standards while controlling costs, Calkins said.
The typical car uses nearly $500 worth of precious metals, including up to a third of an ounce of palladium, while some light trucks use even more. With the new technology, "we're able to achieve the same level of emissions at much lower cost," Boyd said.
Honda owns 10 percent of Catalytic Solutions, but the catalyst company has the right to sell its product to other automakers and is in discussions to do so, Calkins said. She declined to identify the other automakers, citing confidentiality agreements. Catalytic Solutions began mass-producing honeycombs with the new coating in Oxnard in December and is shipping the honeycombs to Japan, where a Honda contractor installs them in catalytic converters, she said.
Palladium prices were unchanged on Wednesday at $967.65 a troy ounce in commodities market spot trading, while platinum prices rose $5.20, to $579 a troy ounce.
Palladium is mined in tiny quantities, mainly as byproducts of the mining of other minerals, notably nickel and platinum.