The most popular method used by vehicle manufacturers to reduce engine emissions is the three-way catalyst (catalytic converter). This device has the ability to take the three main toxic gases produced by an engine which are carbon monoxide (CO), oxides of nitrogen (NOx) and hydrocarbons (HC) and convert them to considerably less harmful, non-poisonous gases: carbon dioxide (CO2), water (H2O) and nitrogen (N2).

To carry out this conversion of gases efficiently the catalyst must operate within a specified temperature range but also be provided with exhaust gases that are within certain very tight tolerances dependant predominantly on air/fuel ratio. The precise control required to operate this system is provided by the use of an exhaust gas oxygen (Lambda) sensor installed upstream of the catalyst. A Lambda sensor has the ability to precisely measure the air/fuel ratio present in exhaust gases. By sending a signal to the control unit it can initiate a change to keep the fuelling system operating within the very tight tolerances required. This is known as a closed-loop control system.

To further improve control of exhaust emissions most vehicles produced after 2000 have an additional Lambda sensor fitted down-stream of the catalyst that monitors the performance of the catalyst itself.