"There is no ban. Palm biodiesel can enter Germany. It is not possible to ban the import of any product as it would go against the very principles of free trade as spelled out by the World Trade Organisation," he said.
The deputy minister was speaking to reporters after witnessing the signing of a biodiesel supply agreement between Carotech Bhd and Swiss-based oil trader Tra-figura Group in Kuala Lumpur yesterday.
He said the German Government's main concern is the production of biofuels that cause the destruction of virgin jungles and the killing of wildlife. It proposes the elimination of soya and palm oils from the list of qualified biofuels for subsidy.
Kohilan said the general concern is the sustainability of biofuel sources. Bankers can be assured that biodiesel producers in Malaysia source their feedstock from oil palm estates that operate in a responsible manner.
In view of the mandatory blending of five per cent biodiesel with 95 per cent regular diesel in government vehicles and the public transportation system from next February, biodiesel producers are in a solid position to repay bank loans, he said.
The deputy minister was responding to the growing concern of banks tightening lending to businesses perceived as risky in the light of slowing global economy.
Malaysia is ranked 24th in the World Bank's Ease of Doing Business Survey 2009 but in the sub-category of access to financing, it is ranked number one.
Earlier, Bank Negara Governor Tan Sri Dr Zeti Akhtar Aziz was reported to have said total financing approved up to September this year was RM230 billion, 9.5 per cent more than the same period last year.
The central bank is in regular engagement with banks to make sure businesses, particularly small and medium enterprises, continue to have access to bank financing.
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