The "white rot" mushroom Trametes versicolor, also known as "Turkey Tails"

The "brown rot" mushroom Laetiporus sulphureus, also known as "Sulphur Shelf"

From my local paper:

A study released today in the journal Science identifies how a group of fungi prevalent in Oregon evolved to digest wood, properties that today hold promise for biofuels and even to clean up environmental contamination. […]

Cellulosic ethanol is a plant-based biofuel. Much like brewing beer, yeast converts a carbohydrate called cellulose into alcohol. But the yeast can’t access the cellulose if it’s trapped by lignin, says Dr. Christine Kelly of OSU, who was not involved in the study. Plants use lignin to prevent the exact sort of microbial attack used to produce cellulosic ethanol. Current techniques to separate lignin from cellulose usually involve chemical extraction or heat, but each has drawbacks.

That’s where white rot comes in.

Scientists may be able to harvest enzymes or perhaps create better ones to break down lignin. In the rapidly evolving biofuels industry, more efficient techniques to remove lignin from cellulose could be a big advance.

Full Story: Oregon Live: Oregon’s forests filled with fungus that offer promise for fuels, eating contamination

The study is here, behind a paywall alas.