Oxygen is not needed for photosynthesis. It is a waste product of photosynthesis which is produced during the light reaction when water is cleaved in presence of sunlight (photolysis of water). This process generates hydrogen ion, electrons and oxygen. Electrons and hydrogen ion are used up in the process, whereas, oxygen is released as a byproduct which is used by other organisms for respiration.
Oxygen is important for cellular respiration. Aerobic respiration takes place in presence of oxygen, where it functions as the terminal electron acceptor. ATP and NADH generated during the overall process of cellular respiration donate their electrons in the electron transport chain, which carries them to oxygen. This process mediates ATP synthesis by the ATP synthase enzyme. Thus, oxygen plays an important role in energy production by cellular respiration.
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