The Bundesrat, the upper house of Germany's parliament, signed off on the measure that paves the way for the introduction of biodiesel fuels on the German commercial market.
Paraffinic diesel fuels, which are produced from waste materials and vegetable oils, will now be allowed to be sold as pure fuels. Until now, they could only be blended with conventional diesel.
Since biodiesel produces less CO2 emissions than conventional diesel, there are expectations that a shift could contribute to combating climate change.
However, the extent to which the new fuel will be available in future is questionable.
According to Germany's Environment Ministry, used cooking oils are already being used in full as an admixture in transport.
The German Association of the automotive Industry (VDA), an influential lobby group, nevertheless spoke of a "good day for the environment and the climate."
Renewable fuels could make a significant contribution to achieving climate targets in the transport sector, VDA president Hildegard Müller said.
"On the road to climate-neutral transport, renewable fuels are the appropriate and urgently needed complement to the mainstay of electromobility," she said.
The automobile club ADAC, which represents German motorists, also spoke of a "further step on the way to lower CO2 emissions for vehicles with petrol or diesel engines."
The auto club said that swift approvals from car manufacturers are now urgently needed so that the new fuels can gain acceptance among consumers.
