N2O also moves into the stratosphere and destroys ozone.
The team were the first to report organic N can react with inorganic N to create hybrid N2 under standard conditions of temperature and pressure.
Until now, it was thought this was only possible biologically.
N2 makes up 78 per cent of our atmosphere and is considered a permanent sink for nitrogen.
The discovery could lead to new opportunities for mitigating excess reactive N in the environment and Phillips believed the research set the stage for many practical applications.
Organic forms of soil N, such as exudates from plants and fungi, could function in the conversion of excess inorganic N that would otherwise be leached into water or emitted as N2O into a form that isn't harmful to the environment.
However, more research is needed to test exactly which forms of organic nitrogen were most effective.
The team is now developing proposals for further funding that will allow them to investigate on-farm applications for transforming excess N from soil and water into unreactive atmospheric N2 gas without producing N2O.
This may allow scientists to develop options to manage the fate of agricultural N while avoiding greenhouse gas emissions.
The research features in the latest edition of the scientific journal Nature Scientific Reports.