Emissions regulations will drive Platinum and Palladium demand

Implications: Emissions from diesel engines will be progressively restricted over the next 10 years worldwide leading to continued demand growth for Platinum.  Recent advances in diesel catalyst technology have enabled the substitution of Pd in place of ~20% - 25% of the Pt.  On gasoline engines it is easier to interchange Pt and Pd in combination with Rhodium [Rh.]

Analysis: The three Platinum Group Metals [PGMs] Pt, Pd, and Rh have been used in catalytic converters for gasoline engines since the 1970's.  Various combinations of the three metals are effective: Pt/Rh, Pt/Pd/Rh, Pd/Rh, or Pd only, etc.  Specific metal selection depends upon market prices and the targeted [selective] performance for conversion of Hydrocarbon [HC,] Carbon Monoxide [CO,] or Oxides of Nitrogen [NOx.]   In addition various Rare Earth metals such as Cerium, Lanthanum, Neodymium, Zirconium, etc. are used as stabilizers and promoters of the PGMs. 

A modern gasoline engine is tuned to run precisely at the stoichiometric Air-Fuel ratio where there is just enough Oxygen to burn all the fuel.   A Diesel engine runs at very lean A-F ratios where there is a large amount of extra Oxygen in the exhaust gas.  Because of this the same catalyst that is so effective on a gasoline engine would be ineffective on a Diesel.  

One  main difference is that it is effectively impossible to convert NOx on a Diesel with a conventional Pt/Rh catalyst.  The Pt Diesel Oxidation Catalysts [DOCs] that were developed for Diesels are very effective in oxidizing HC and CO gaseous emissions as well as the Soluble Organic Fraction [SOF] of unburned fuel and oil particles, but are ineffective for NOx.

Another major difference with Diesel emissions is the high level of Carbon soot, or Particulates, that often appear as black smoke.  To reduce Particulate emissions a ceramic Diesel Particulate Filter [DPF] is used.  In most cases the DPF is also coated with a Pt catalyst to help oxidize the trapped soot and release it as CO2 gas.

The major catalyst suppliers have been successful in applying Pd to DOC and DPF catalysts to a limited extent.  In most cases up to 20%-25% of the Pt can be replaced with Pd depending on operating temperatures, gas flow rates, and other factors.

Future restrictions on Diesel NOx emissions will require the use of another catalyst in combination with the existing DOC and DPF.  The most common approach today is to use a zeolite based Selective Catalytic Reduction [SCR] system with a Urea exhaust gas additive system.    SCR does not require PGMs although Pt SCR catalysts have been used in certain stationary source [ie smokestack] applications.  The alternative to SCR is a class of new materials known as NOx traps, NOx adsorbers, or Lean NOx traps [LNT.]  Development of these materials is ongoing with limited commercial application to date.  Various LNT formulations may require more PGMs but specific compositions and quantities are not known yet.

In summary:  Demand for Pt will grow driven by tighter regulations on diesel engine emissions.  Today's European diesel passenger cars and US diesel trucks use DOCs and DPFs; in the future European trucks and US off-road equipment will also need these as well as SCR/LNT.  Demand will also grow in Asia and ROW markets as catalyst technologies mature.  As market prices dictate automakers will likely substitute Pt and Pd catalysts on gasoline engines to help balance demand while working to reduce Pt utilization in Diesel applications.