A tree-living fungus that produces a substance similar to diesel fuel has been discovered in South America.  Related photos

'Diesel' producing fungus found

Experts believe Gliocladium roseum could potentially be a completely new source of green energy.

The fungus, which lives inside the Ulmo tree in the Patagonian rainforest, naturally produces hydrocarbon fuel similar to the diesel used to power cars and lorries.

Scientists were amazed to find that it was able to convert plant cellulose directly into the biofuel, dubbed "myco-diesel".

Crops normally have to be converted to sugar and fermented before they can be turned into useful fuel.

Professor Gary Strobel, from Montana State University in the US, said: "G. roseum can make myco-diesel directly from cellulose, the main compound found in plants and paper. This means if the fungus was used to make fuel, a step in the production process could be skipped."

Prof Strobel led an investigation into novel fungi in the rainforests of northern Patagonia, which cross the borders of Argentina and Chile.

He found that when the diesel fuel fungus was exposed to potentially toxic antibiotics, it reacted defensively by generating volatile gases.

"Then when we examined the gas composition of G. roseum, we were totally surprised to learn that it was making a plethora of hydrocarbons and hydrocarbon derivatives," he said.

"The results were totally unexpected and very exciting and almost every hair on my arms stood on end."

Cellulose provides the fibrous supporting structure of plants. During biofuel production, cellulose from plant waste is first treated with enzymes that turn it into sugar. Microbes then ferment the sugar into inflammable ethanol.

Nearly 430 million tonnes of plant waste is produced from farmland each year around the world.

Prof Strobel said: "We were very excited to discover that G. roseum can digest cellulose. Although the fungus makes less myco-diesel when it feeds on cellulose compared to sugars, new developments in fermentation technology and genetic manipulation could help improve the yield.

"In fact, the genes of the fungus are just as useful as the fungus itself in the development of new biofuels."