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Ammonia is naturally present in the environment as a consequence of the presence of decaying plant or animal matter or from animal excreta. Industrial activity may potentially cause local and regional elevations in emission and atmospheric concentrations.

In the aqueous environment, ammonia will be present as ammonia (NH3) or ammonium ion (NH4+); the relative proportions of the two chemical species are dependent on pH and (to a lesser extent) temperature. At environmentally relevant pH values of 5- 8, the predominant form will be NH4+. At higher pH values the proportion of ammonia (NH3) increases. The background concentration of ammonia in surface water varies regionally and seasonally. Survey data for total ammonia have reported average concentrations of < 0.18 mg/litre in most surface waters, and around 0.5 mg/litre in waters near large metropolitan areas. In ground water, ammonia levels are usually low as a consequence of the strong adsorption of the ammonium ion on clay minerals, or bacterial oxidation to nitrate, both processes which limit mobility in soil. Ammonia in soil is in dynamic equilibrium with nitrate and other substrates in the nitrogen cycle.

Ammonium is readily converted by bacterial species to nitrate, via the process of nitrification. The primary stage of nitrification, the oxidation of ammonium to nitrite (NO2-) is performed by Nitrosomonas (among other) species. Other bacterial species (including Nitrobacter) are responsible for the subsequent oxidation of nitrite to nitrate (NO3-). Nitrification is important in preventing the persistence or accumulation of high ammonia levels in waters receiving sewage effluent or agricultural runoff. Other mechanisms may also act to limit the concentration of ammonia in natural waters: ammonia is readily assimilated by aquatic algae and macrophytes for use as a nitrogen source. Ammonia in the aqueous environment may also be transferred to sediments by adsorption on particulates, or to the atmosphere by volatilisation at the air-water interface. Both processes have been described as having measurable effects on ammonia levels in water; however, the relative significance of each will vary according to specific environmental conditions.

In soil, ammonia is readily converted by a variety of bacteria, actinomycetes and fungi to ammonium (NH4+) by the process of ammonification or mineralization. Ammonium is then rapidly converted to nitrate. Nitrate is subsequently taken up and utilised by plants or returned to the atmosphere following denitrification; the metabolic reduction of nitrate into nitrogen or nitrous oxide (N2O) gas. The most likely fate of ammonium ions in soils is conversion to nitrates by nitrification.