By far the largest use of palladium today is for automobile catalytic converters. The growth in the number of cars worldwide is expected to continue unabated with an increasing number of cars produced each year, each required to meet increasing environmental standards. Many of the cars reaching the end of their useful life in developed countries of the world are increasingly finding their way to less developed countries as used cars. Some used cars simply gravitate there; others are even being refurbished and then freighted. This will delay and may eliminate the recovery of metals in many of these cars. Working against some of these gains will be increasing fuel economy and improved engine and catalytic technology, both of which will reduce the level of PGM loadings per car. As catalytic converter technology advances, there is continual fine tuning of the technology to steadily thrift down the PGMs required to meet a given emission standard. Due to palladium’s current and historic cost advantage, gasoline catalytic converter technology worldwide is now almost exclusively palladium based, augmented with small amounts of platinum and rhodium where necessary.
Diesel emissions are lower temperature than gasoline emissions and use more platinum than palladium. Platinum's primary advantage in diesel applications relates more to the fact that the diesel exhaust stream is a highly oxidizing environment in which palladium is readily oxidized to a less catalytically active palladium oxide, whereas platinum resists oxidation and remains active in its metallic form. Platinum is also more resistant to sulfur poisoning than palladium. In a gasoline exhaust stream, the high temperatures mean that the catalyst automatically de-sulfates. In the lower temperature diesel environment, de-sulfation occurs less readily. However, when it comes to reducing or eliminating diesel particulate matter, which is essentially carbon, temperatures must be increased in order for the carbon to be oxidized before being exhausted. At the higher temperatures palladium is important, as it not only reacts well at higher temperatures, but it can also tolerate higher temperatures better than platinum. Further, given palladium's cost advantage over platinum, there is an economic incentive to develop the technology using palladium.
As the number of cars on the road increases, further cuts in pollution per vehicle are needed to keep improving air quality. Many governments in the fast growing emerging markets of Brazil, India, and China – the BRIC countries, are putting legislation in place to catch up with the standards already implemented in the US, Europe and Japan, which will lead to higher required PGM loadings for vehicles in these BRIC nations. Catalytic converters are now also required on construction and agricultural equipment in many markets.