By Leah Douglas

Aug 7 (Reuters) - The U.S. Epa has actually introduced examinations into the supply chains of a minimum of two eco-friendly fuel manufacturers amid market concerns that some might be using fraudulent feedstocks for biodiesel to protect rewarding federal government subsidies.

EPA representative Jeffrey Landis told Reuters that the agency has launched audits over the previous year, but declined to determine the business targeted because the investigations are continuous.

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

The problem entered into focus following a surge in used cooking oil exports from Asia recently that experts have actually said involves unrealistically high volumes relative to the quantity of cooking oil utilized and recovered in the area. The European Union is likewise examining feedstocks over the fraud issues.

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

"EPA has carried out audits of renewable fuel producers given that July 2023 that includes, to name a few things, an examination of the locations that used cooking oil used in eco-friendly fuel production was gathered," he stated. "These investigations, however, are continuous and we are unable to discuss ongoing enforcement investigations."

U.S. senators from farm states have actually required more oversight of biofuel feedstocks, saying federal firms need to be as extensive in verifying imports as they are auditing domestic supply chains.

"The Biden administration has developed vigorous requirements to validate, not just trust, American producers, and it is vital that the exact same scrutiny is used to imported feedstocks," 6 U.S. senators, led by Roger Marshall and Sherrod Brown, wrote in a June 20 letter to federal agencies.

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