Activated charcoal, or activated carbon, is used for its absorbent properties. In aquarium filters it traps bacteria, and in poisoning cases it absorbs the contents of the victim's stomach. When placed near something with a strong smell, it absorbs the odor, making it useful for controlling litter box smells.
Although each piece is small, the surface area of activated charcoal is larger than it appears thanks to multiple pores. These pores trap odors as they pass through the surface area of the charcoal. Because of the large surface area they create, they can trap a large amount of odors. This makes activated charcoal useful for trapping odors that emanate from a cat's litter box. To work, however, the charcoal must be placed near the box.
Some enclosed litter boxes come with slots in the cover for inserting a carbon filter. The filters to fit these slots are usually in the form of cassettes with a plastic frame and carbon placed between two pieces of sheer material. Since they sit directly at the top of the litter box cover, they simply trap rising smells. If your cover doesn't have a slot, you can cut slits in the top, or drill holes in a grid, and place a filter on the top, using removable double-sided tape to hold it in place.
Make your own activated charcoal filter by sewing a small pouch out of cheesecloth and filling it with charcoal, or placing the charcoal in the center and tying the cloth into a packet. Put the pouch on or near the litter box. If dust particles from the charcoal are leaking through the cheesecloth, put it in a small container and place it near the cat's box.
If your cat won't mess with it, and you don't have to worry about children getting into the charcoal and making a mess, you can simply place loose activated charcoal in a small bowl or shallow container near the litter box. Be sure to remove it or set it up high if children are around. It is not toxic, but the black dust is easily spread around and can stain garments and carpet.