Bemoaned, belittled and beloved; catalytic converters can be many things to many people, depending on their perspective. While converters do sap horsepower and fuel economy, they also make an enormous impact in terms of the engine's more dangerous emissions. With the millions of vehicles on the road today, that amounts to a not-insignificant improvement in air and water quality for future generations. But to understand how important converters are, first you need to understand exactly how they work.
Modern catalytic converters consist of a stainless steel outer case and two ceramic blocks inside. These ceramic blocks aren't solid; rather, they are constructed to resemble a honeycomb, shot through with thousands of tiny holes referred to as micro-ducts. Platinum and rhodium coat the walls of the micro-ducts in the first ceramic block; platinum and palladium coat the micro-duct walls in the second block.
First Stage Recombining
The first stage of emissions reformation happens in the first ceramic block, after exhaust heat drives the block's internal temperature up to about 704 degrees Celsius. Exhaust gases consist of three basic molecules: nitrogen oxide (nitrogen and oxygen atoms bonded together), carbon monoxide and unburned fuel. After exiting the engine, the nitrogen oxide comes into contact with the hot platinum and rhodium in the first block. This causes each nitrogen oxide molecule to lose an oxygen and nitrogen atom. After enough of these atoms strip away, nitrogen recombines with nitrogen (creating pure nitrogen gas) and oxygen recombines with oxygen (creating pure oxygen gas).
Now the nitrogen gas, oxygen gas, carbon monoxide and unburned fuel enter the second catalyst block. The oxygen gas from the first reaction sticks to the platinum and palladium walls there. Unburned fuel (mostly hydrogen and carbon) encounters these free oxygen atoms, combusting with them just the way that they would inside your engine. This combustion creates carbon dioxide, water and more heat. That extra heat drives the second block's temperature high enough to force the carbon monoxide molecules to pick up one of the stuck oxygen atoms, thus turning dangerous carbon monoxide into relatively harmless carbon dioxide. The net result between these two reactions is that most of the nitrogen oxides, carbon monoxide and unburned fuel molecules turn into nitrogen, carbon dioxide, heat and water.
Platinum, rhodium, palladium and caesium (used in some oxygen-storing converters) are among the rarest and most expensive metals on Earth. A single pound of any of these can cost anywhere from £13,000 to £65,000.
It's technically illegal to remove or bypass a working catalytic converter, even on race-cars and off-road vehicles that will never see street duty or be subject to emissions inspections. Why EPA inspectors don't show up to every dragstrip in the country is anybody's guess.
Removing or bypassing a catalytic converter can help to free up some horsepower, but it might not be as much as you think. Modern ceramic-matrix cats are efficient and free-flowing enough that removing them -- especially on small-displacement vehicles -- is generally more trouble than it is worth; especially when you consider that doing so will trigger a "check engine" light, requiring the installation of a "MIL eliminator" in the second O2 sensor's wiring harness to trick the computer into thinking that the converter is still there.