By Leah Douglas

Aug 7 (Reuters) - The U.S. Environmental Protection Agency has actually launched investigations into the supply chains of a minimum of 2 eco-friendly fuel producers in the middle of industry concerns that some may be utilizing fraudulent feedstocks for biodiesel to protect rewarding federal government subsidies.

EPA representative Jeffrey Landis informed Reuters that the company has actually launched audits over the previous year, however declined to recognize the companies targeted since the examinations are continuous.

The production of biodiesel from sustainable active ingredients, like used cooking oil, can earn refiners a variety of state and federal ecological and environment aids, consisting of tradable credits under a program administered by the EPA called the Renewable Fuel . But worries have actually been installing that some supplies identified as utilized cooking oil are actually cheaper and less sustainable virgin palm oil, an item that is connected with logging and other environmental damage.

The concern came into focus following a surge in used cooking oil exports from Asia in the last few years that experts have said involves unrealistically high volumes relative to the quantity of cooking oil used and recovered in the area. The European Union is likewise investigating feedstocks over the fraud concerns.

The EPA audits started after the firm updated domestic supply-chain accounting requirements in July 2023 for sustainable fuel manufacturers seeking to make credits under the RFS, he said.

"EPA has conducted audits of renewable fuel manufacturers since July 2023 which includes, among other things, an evaluation of the locations that used cooking oil utilized in sustainable fuel production was gathered,” he said. “These examinations, nevertheless, are continuous and we are unable to go over ongoing enforcement investigations.“

U.S. senators from farm states have called for more oversight of biofuel feedstocks, stating federal companies need to be as rigorous in confirming imports as they are auditing domestic supply chains.

"The Biden administration has actually created vigorous standards to confirm, not just trust, American manufacturers, and it is necessary that the exact same examination is used to imported feedstocks,” 6 U.S. senators, led by Roger Marshall and Sherrod Brown, wrote in a June 20 letter to federal companies.

Another letter from 15 senators to the Treasury Department on July 30 urged the administration to exclude imported feedstocks like UCO from an additional clean fuel tax credit program passed in the Inflation Reduction Act. (Reporting by Leah Douglas in Washington Editing by Richard Valdmanis and Matthew Lewis)