The World Gold Council in London and emission control technology group Nanostellar of Redwood City, Calif., have begun a strategic partnership aimed at developing gold as an ingredient in the manufacture of automotive catalytic converters that now rely on platinum group metals.

In a statement, the council says it has invested in the nanotechnology firm "in order to facilitate the commercialization and marketing of the gold-based technology that could increase industrial demand for gold." That's because Nanostellar has developed a new product, NS Gold, a catalyst formulation for use in the automotive industry that for the first time includes gold alongside traditional metals of platinum and palladium.

The inclusion of gold would enable manufacturers of light- and heavy-duty diesel engines to reduce noxious emissions by as much as 40% more than existing pure platinum catalysts, enabling significant savings for automotive manufacturers, according to the World Gold Council.

Last year, an estimated 4.24 million oz of platinum was used in automotive catalysts. But the price of platinum is at least 50% higher than gold. Because of this cost penalty, gold has been under study for some time in catalytic converters—"but until now the technical challenges concerning catalyst durability have prevented gold's use," the council says. If adopted by the automotive industry, the new product could lead to an increase in industrial demand for gold, which in 2006 totaled 16.1 million oz.