A tree fungus could be used to power diesel cars after it was found to contain many similar properties to that of regular diesel fuel.

It is found in the Patagonian rainforest and is remarkably similar to the fuel in its natural state, meaning that it could be used directly in a modern diesel engine with virtually no modification.

"This is the only organism that has ever been shown to produce such an important combination of fuel substances," said Gary Strobel, a plant scientist from Montana State University and lead researcher on the project, according to the Guardian.

"We were totally surprised to learn that it was making a plethora of hydrocarbons," he added.

Living in a tree

The fungi, called Gliocladium roseum, were discovered growing inside a tree in the Patagonian rainforest and not only exhibits the same properties as diesel, but also eats the waste produced by biofuel production.

Although the project is still in its very early stages, the fungi could be used to dramatically improve the efficiency of biofuels production as well as providing a fuel source of its own.

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

The results of the finding will be published in this month's edition of the Microbiology journal.