Ford Develops Platinum-Free Auto Emission System; Big Savings Seen

Ford Motor, in a move that could mean major cost savings for the auto industry, said Thursday that it has developed a substitute for precious platinum in catalytic converters used to clear vehicle emissions.

Ford Chairman Donald E. Petersen, announcing the development in a speech in Pittsburgh, said the substitute is just as effective as platinum but is significantly cheaper.

Ford spokesman Bill Peacock refused to disclose the material used by Ford as a substitute for platinum. But he said the auto maker will realize a substantial savings per car because of the substitute.

General Motors said it was interested in learning more about the Ford development, but Chrysler said it already had developed its own platinum-free catalytic converter that uses a combination of the precious metals rhodium and palladium instead.

The Ford announcement was seen as significant because the auto maker produces 4 million cars and trucks a year in the United States, of which 3.5 million have catalytic converters that use platinum.

A spokeswoman for the Environmental Protection Agency said catalytic converter systems cost auto makers between $375 and $500 per vehicle. Of that amount, EPA researchers estimated that $50 of the cost is for platinum.

This means Ford uses an estimated $175 million in platinum in the converters installed on its vehicles. In addition to potential savings, industry officials said Ford could make substantial profits by licensing its technology, which it has patented.

Platinum prices tumbled on the news. Platinum futures sank the $25 daily limit to $579.50 an ounce on the New York Mercantile Exchange on assessments that Ford’s new technology will slash demand for the metal. Platinum closed at $555 an ounce in London, down from its morning settlement of $599.75 and its lowest finish since the start of November.

The platinum-free catalytic converters are being installed first on 40,000 to 50,000 1989 Ford Thunderbird and Cougar models that will be sold in California, Peacock said.

The EPA has required that cars and trucks be equipped with catalytic control systems since 1975. It has progressively made emissions control requirements more stringent. They are even tougher in California, which has its own emissions requirements.

Converters will soon be required to be used on some cars sold in Europe, although standards are much less strict than in the United States.

Auto makers have tried for years to find a substitute for platinum, which is mainly produced by South Africa, the Soviet Union and Canada. The precious metal, generally used in combination with rhodium and/or palladium, reacts with emissions inside the catalytic converter to change them into safe levels of pollutants.

But Johnson Matthey, a leading platinum refiner, said it was not changing its immediate outlook for the world platinum market, as it was aware of Ford’s development when it published a bullish report last month. Johnson Matthey, which said it had worked with Ford on developing the new converter, said its view of the near-term market fundamentals for platinum remained unchanged. The refiner had predicted a 10% increase in platinum demand this year against a 2.3% rise in world supply.

EPA spokeswoman Martha Casey said the agency was not aware of Ford’s research but applauded the development. “We welcome any innovative ideas for controlling emissions,” Casey said. “It is up to the manufacturers to choose their technology. If they can come up with a better way, we’re all for it.”

Casey said the EPA did not know what material Ford chose to use in place of platinum. “If they have requested that the information be kept confidential, we will honor that request,” she said.

GM spokesman Donald Postma said GM has tried for years to find a substitute for platinum as part of ongoing research programs. “We are obviously interested in what they have, and we hope they have made progress in cleaning the air,” he said.

Chrysler spokesman Ben Dunn said Chrysler has installed a number of platinum-free converters on its production models. Dunn would not say how many models carry the platinum-free converters.