A Palmerston North dairy farm is home to an experiment that could radically cut New Zealand's methane emissions - simply by putting a lid on effluent ponds.

Scientists at Government-owned science company Landcare Research have taken volcanic soils from the top of Taupo District Council's landfill and will use them to cultivate methane-eating bacteria.

The bacteria - called methanotrophs - thrive in volcanic soils and eat methane, spitting out water and carbon dioxide in its place.

Carbon dioxide is itself a greenhouse gas, but with a global warming potential 20 times less potent than methane.

The bacteria have already proved effective at cutting greenhouse gases from landfills. Now scientists hope they will be equally useful at filtering gases from the farm effluent ponds.

Landcare Research scientist Adrian Walcroft said effluent ponds were the source of 9 to 18 per cent of methane emissions from the average dairy herd. Only 5 per cent of New Zealand herds were big enough (800-1000 cows) to justify turning their methane into energy.

But even at low carbon prices, a methane biofilter could be profitable for the average 351-cow farm, he said.

In laboratory tests, volcanic soil from Taupo's landfill cap proved excellent at growing hungry methanotrophs, which responded instantly when methane concentrations in the air increased.

Dr Walcroft is about to install a prototype over the effluent pond on a Palmerston North dairy farm. If it works well, it could also be used in piggeries, and indoor animal housing, such as wintering barns.

Methane makes up just over a third of New Zealand's total greenhouse gases, and technologies to combat it are not well advanced.

The main source is bacteria that digest plant material in the rumen of grazing animals, which other scientists hope to combat with technology such as vaccines and breeding programmes to cut methane from plant digestion. The effluent pond filter would be made up of a porous surface for bacteria to grow on, placed over the effluent pond to filter gas as it rose.

Dr Walcroft said the bacteria could cut methane from effluent by up to 98 per cent.

Other scientists have found species of methanotrophs at the Tikitere geothermal field - also known as Hell's Gate - near Rotorua, and it is believed New Zealand may have species that live nowhere else.