By Leah Douglas

Aug 7 (Reuters) - The U.S. Environmental Protection Agency has actually released investigations into the supply chains of at least 2 eco-friendly fuel manufacturers amid market issues that some might be using fraudulent feedstocks for biodiesel to protect rewarding federal government subsidies.

EPA spokesperson Jeffrey Landis informed Reuters that the firm has actually launched audits over the past year, however decreased to identify the business targeted because the examinations are ongoing.

The production of biodiesel from sustainable ingredients, like used cooking oil, can make refiners a slew of state and federal ecological and climate aids, consisting of tradable credits under a program administered by the EPA called the Renewable Fuel Standard. But fears have actually been mounting that some as utilized cooking oil are actually less expensive and less sustainable virgin palm oil, an item that is associated with deforestation and other ecological damage.

The concern came into focus following a surge in utilized cooking oil exports from Asia recently that analysts have said includes unrealistically high volumes relative to the amount of cooking oil utilized and recuperated in the region. The European Union is likewise examining feedstocks over the scams concerns.

The EPA audits began after the agency upgraded domestic supply-chain accounting requirements in July 2023 for renewable fuel manufacturers seeking to make credits under the RFS, he said.

"EPA has actually carried out audits of renewable fuel manufacturers because July 2023 which consists of, to name a few things, an evaluation of the areas that utilized cooking oil used in eco-friendly fuel production was gathered,” he stated. “These examinations, however, are continuous and we are unable to discuss continuous enforcement investigations.“

U.S. senators from farm states have required more oversight of biofuel feedstocks, saying federal agencies ought to be as rigorous in confirming imports as they are auditing domestic supply chains.

"The Biden administration has actually produced energetic requirements to confirm, not just trust, American manufacturers, and it is crucial that the very same scrutiny is applied to imported feedstocks,” six U.S. senators, led by Roger Marshall and Sherrod Brown, wrote in a June 20 letter to federal firms.

Another letter from 15 senators to the Treasury Department on July 30 prompted 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)