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Colombia has raised the mandated blend of biofuel in diesel and gasoline to 10%, according to mining and energy minister Germán Arce.
The new standards took effect on Thursday as the government tackles rising pollution, particularly in Bogotá and Medellín.
The current national admixture levels are 8% for ethanol and 9% for biodiesel.
National biofuel association Fedebiocombustibles praised the decision but said palm oil and ethanol producers could handle even higher blends.
"There is enough installed industrial capacity and sufficient raw material to reach up to 18% [admixture levels] if the government so decided," Fedebiocombustibles president Jorge Bendeck said.
According to Bendeck, who cited World Bank figures, air pollution caused 4,872 premature deaths in Bogotá and Medellín in 2013.