By Leah Douglas

Aug 7 (Reuters) - The U.S. Epa has actually introduced investigations into the supply chains of at least two eco-friendly fuel producers amidst industry issues that some may be using fraudulent feedstocks for biodiesel to protect lucrative federal government subsidies.

EPA representative Jeffrey Landis told Reuters that the firm has actually introduced audits over the previous year, but declined to recognize the business targeted due to the fact that the examinations are ongoing.

The production of biodiesel from sustainable components, like utilized cooking oil, can make refiners a multitude of state and federal ecological and environment subsidies, including tradable credits under a program administered by the EPA called the Renewable Fuel Standard. But fears have actually been mounting that some products identified as used cooking oil are really more affordable and less sustainable virgin palm oil, a product that is related to deforestation and other environmental damage.

The issue came into focus following a surge in utilized cooking oil exports from Asia in current years that experts have stated includes unrealistically high volumes relative to the quantity of cooking oil utilized and recovered in the region. The European Union is likewise investigating feedstocks over the scams concerns.

The EPA audits started after the company supply-chain accounting requirements in July 2023 for renewable fuel manufacturers looking for to make credits under the RFS, he stated.

"EPA has conducted audits of renewable fuel manufacturers considering that July 2023 that includes, among other things, an examination of the places that used cooking oil utilized in eco-friendly fuel production was gathered," he stated. "These investigations, however, are ongoing and we are not able to go over ongoing enforcement investigations."

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

"The Biden administration has actually produced vigorous requirements to validate, not just trust, American producers, and it is essential that the same analysis 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 advised the administration to omit 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)