The Brazilian government has approved an increase to 11% from 10% in the amount of biodiesel to be blended into all diesel sold in the country, oil and fuels regulator ANP said.
The measure will be implemented from September 1, ANP said.
Biodiesel producers group Ubrabio said the new blending rules will lead to a record production of the biofuel in 2019, estimated now at 6 billion liters.
Currently, Brazil is the world's second largest biodiesel producer, behind only the US, and was responsible for producing 5.3 billion liters last year.
The new blending rules will also increase domestic processing of oilseeds used to make the biofuel, particularly soybeans, and at the same time reduce imports of oil-based diesel, the association noted.