A three-way catalytic converter reduces exhaust emissions of carbon monoxide, hydrocarbons (unburned gas) and nitrogen oxides (the smog-producing pollutant).When catalytic converters arrived in 1975, they reduced emissions of only carbon monoxide and hydrocarbons.n a three-way converter, exhaust gases pass through a honeycomb of rare metals — platinum, palladium and rhodium — and the resulting chemical reaction converts harmful emissions into harmless carbon dioxide, water and nitrogen. Learn more. 1  New Nissan Catalytic Converter Could Save Money (KickingTires).