By Leah Douglas

Aug 7 (Reuters) - The U.S. Epa has actually released examinations into the supply chains of at least two eco-friendly fuel producers in the middle of market issues that some may be utilizing fraudulent feedstocks for biodiesel to protect financially rewarding government subsidies.

EPA representative Jeffrey Landis informed Reuters that the company has introduced audits over the past year, but declined to recognize the companies targeted since the examinations are ongoing.

The production of biodiesel from sustainable ingredients, like used cooking oil, can earn refiners a slew of state and federal environmental and climate 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 supplies identified as used cooking oil are actually less expensive and less sustainable virgin palm oil, an item that is related to logging and other ecological damage.

The problem came into focus following a rise in used cooking oil exports from Asia in recent years that analysts have said involves unrealistically high volumes relative to the amount of cooking oil utilized and recovered in the area. The European Union is likewise examining feedstocks over the fraud issues.

The EPA audits began after the firm updated domestic supply-chain accounting requirements in July 2023 for eco-friendly fuel producers looking for to earn credits under the RFS, he said.

"EPA has conducted audits of eco-friendly fuel manufacturers because July 2023 that includes, among other things, an examination of the locations that used cooking oil used in sustainable fuel production was collected," he stated. "These investigations, however, are continuous and we are not able to go over continuous enforcement investigations."

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

"The Biden administration has created energetic requirements to confirm, not just trust, American producers, and it is vital that the very same examination is used to imported feedstocks," six U.S. senators, led by Roger Marshall and Sherrod Brown, composed in a June 20 letter to federal agencies.

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