What are the pros and cons to removing the emissions and vacuum system?
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^ what he said.
The biggest risk is when you sell it. A desmogged cruiser has a much smaller pool of potential buyers.
Another "risk" is that most people do it wrong or go too far and make things worse.
A car without a catalytic converter will stink up everything wherever it goes. People will comment on it. But a straight pipe instead of a cat will definitely keep the whole exhaust system cooler and the engine bay and interior of the car a lot cooler after shutdown. Engine will run better above 2500 rpm due to less restriction.
What is the right way to do it?
Understand what you have and understand what each system does and it’s relationship to the engine’s operation & performance. There is not a set way to desmog. You can eliminate 1 system, several or all.
instead of a straight pipe in place of the cat better to put in a dummy cat...one that looks like a cat but has a straight pass through inside. States like Vermont don't have an emissions check but they do look to see if the Cat is actually there. but a Cat without an air-pump will not function properly and likely lead to untimely demise of the cat.
I think the best way to desmog is to convert to fuel injection and run a new higher flowing cat. This way you could still pass a sniffer test and get all the improved driveability of EFI. Bit costly though.
First you've got to decide WHY you want to remove the stuff. If the engine runs fine then don't mess with it. Usually a de-smog project starts because the vehicle no longer is required to pass smog tests anymore and one or more of the components is malfunctioning and/or the owner just wants to clear out the engine bay of clutter for aesthetic reasons.
I have to admit that a stock 2F is a horrible sight to see with all those endless miles of vacuum hoses, and once they're mostly all gone and crap is removed it's like looking at a wide open vista out in the wilderness compared to a jamb packed ghetto in the city.
So just from an aesthetic point of view it can be worth it not getting chest pains every time you open the hood to behold the rats nest of pneumatic insanity gone feral.
From a performance point of view, a worn out EGR valve (and they're all worn out now at 30 years) doesn't actuate according to spec anymore. It's spring and diaphragm are looser than when it was new, so it opens too soon and too far, causing poor performance and hesitation at light throttle. Also the EGR modulator that controls it can malfunction with age.
So disconnecting the EGR system (along with recurving the distributor spark advance) can make the engine perform much nicer and make the cruiser more fun to drive. It's not like a turbo was suddenly added, but the power curve feels solid instead of hesitationy.
Another monster that exists in the FJ60 is the catalytic converter. It was a tacked on design that chokes the motor. All cars have them by law but when it's removed from the exhaust line, the engine suddenly can breathe and you'll definitely feel it above 2200 rpm or so. The 3F-E in the FJ62 addressed this problem, getting two cats in parallel instead of the one choker on the 2F.
Also it's an incredible heat generator. It heats up the cabin cuz it's huge & directly below the floor and really heats up the engine compartment after shut down. It's likely the reason there's a manifold fan on the engine bay. It's heat migrates up the exhaust pipe and it's likely a contributor to warping manifolds because of the intense heat.
The air injection system takes up so much room in the engine bay that getting to a bolt on that side is darn near impossible due to the overgrowth of vacuum and air lines. Also it can seize if it's old and leave you stranded- which is reason enough to get rid of it & swap it with an idler pulley.
The other smog stuff in the 2F doesn't impact the engine performance negatively and almost all of it actually increases driveability, so personally I don't recommend removing it. But some guys like to tear it all out just because they can.