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Nitrous oxide, the gas that makes up one-sixth of New Zealand's greenhouse emissions, has become the most potent destroyer of the ozone layer.

New research shows that the gas generated by livestock and farm fertilisers - also known as the anaesthetic "laughing gas" - has overtaken CFCs as the biggest ozone-depleting substance.

Researchers at the United States National Oceanic and Atmospheric Administration have warned that the gas will remain the biggest weakener of ozone for the rest of the 21st century if nothing is done - thanks in part to the success of global efforts to cut CFCs.

New Zealand scientists are working on ways to cut nitrous oxide (N2O) emissions from farms.

Atmospheric scientists said it was now clear that work could help heal the ozone layer, as well as cut the country's greenhouse gases.

Dr Paul Johnston, of the Institute of Water and Atmospheric Research (Niwa), said the new paper was the first to calculate the ODP or "ozone depleting potential" of nitrous oxide.

Researchers had long known that the gas depleted ozone but had not measured how potent it was.

Unlike CFCs, N2O was not covered by the 1987 Montreal Protocol to combat ozone depletion, because most of it is not produced by human activities.

N2O is produced naturally when bacteria in the soil break down nitrogen-containing compounds.

However, Dr Johnston, who is based at Niwa's atmospheric research centre at Lauder in Central Otago, said its present growth was "clearly" being driven by humans.

The US authors found that if N2O kept increasing at current rates, by 2050 it would be destroying the ozone layer at a third of the rate CFCs did when at their peak in 1987.

The ozone layer - which sits about 15-30km above the Earth - reduces the amount of skin-cancer-causing ultraviolet light that reaches the Earth from the sun.

Dr Johnston said measurements by Niwa staff had helped global efforts to improve ozone modelling.

"It is exciting to see this [study] ... after nearly 20 years of measuring," he said.

New Zealand Crown researchers have set a goal of leading the world in combating N2O and methane, the other major greenhouse gas from livestock.

Trials led by the Pastoral Greenhouse Gas Consortium have shown that a type of fertiliser known as DCD could cut N2O emissions by up to 70 per cent.

Researchers want to see how well it performs on different farms and in different regional climates. They also hope to prove it increases grass growth to the point where it is profitable for farmers to use.

Last month, the Ministry of Agriculture and Forestry and Fonterra announced a further $10 million investment over three years towards developing N2O-cutting techniques.

The Government has put DCD forward to count towards New Zealand's official emissions cuts under the Kyoto Protocol in 2015.