Scientists at the University of Texas at Austin say this yeast produces oils and fats known as lipids that can be used in place of petroleum-derived products.
Because the yeast cells grow on sugars, research leader Hal Alper calls the biofuel produced by this process "a renewable version of sweet crude."
The technique produces the highest concentration of oils and fats reported through fermentation, the process of culturing cells to convert sugar into products such as alcohol, gases or acids, the researchers wrote in the journal Nature.
Genetically engineering the yeast cells enables up to 90 percent of the cell mass to become lipids, which can then be used to produce biodiesel, they said.
"To put this in perspective, this lipid value is approaching the concentration seen in many industrial biochemical processes," Alper, a professor of chemical engineering, said. "You can take the lipids formed and theoretically use it to power a car."