Soon, power-up mushrooms may not be just for video game characters.

Scientists have discovered a fungus growing in a South American rainforest that naturally produces a substance similar to biodiesel.

A fungus that makes biodiesel as part of its natural lifecycle has attracted the attention of American scientists wishing to tap into its potential.

The fungus has been discovered living in trees in the Patagonian rainforests and is believed to be unique in its ability to synthesize a variety of substances useful in fuel production.

“This is the only organism that has ever been shown to produce such an important combination of fuel substances,” said Professor Gary Strobel from Montana State University.

“The fungus can even make these diesel compounds from cellulose, which would make it a better source of biofuel than anything we use at the moment.”

The fungus, which has been named Gliocladium roseum, produces a number of different molecules made of hydrogen and carbon that are found in diesel.

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In its natural habitat - the rainforest - the newly discovered fungus produces lots of long chain hydrocarbons and other biological molecules.

But when the researchers grew it in the lab, it produced fuel that is even more similar to the diesel we put in our cars.

“When crops are used to make biofuel they have to be processed before they can be turned into useful compounds by microbes,” said Professor Strobel.

“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.”

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