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The history is a little vague; but the two prominent people who first "discovered" and applied bio-diesel were George Washington Carver and Rudolf Diesel.

Rudolf Diesel was the creator of the Diesel Engine and he ideally envisioned the diesel engine being used with a bio-fuel source. On a side note, he actually presented a diesel engine running on peanut oil in the Paris Exhibition in 1889.

George Washington Carver worked with Henry Ford to create a bio-diesel engine; however, at the time petrol-diesel was more easily accessible and cheaper than to produce a bio-diesel fuel source.

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