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By Leah Douglas

Aug 7 (Reuters) - The U.S. Environmental Protection Agency has actually introduced investigations into the supply chains of a minimum of two sustainable fuel manufacturers amid market issues that some may be using fraudulent feedstocks for biodiesel to secure lucrative federal government aids.

EPA representative Jeffrey Landis informed Reuters that the company has actually introduced audits over the past year, but decreased to recognize the companies targeted because the investigations are ongoing.

The production of biodiesel from sustainable components, like utilized cooking oil, can make refiners a variety of state and federal environmental and environment subsidies, consisting of tradable credits under a program administered by the EPA called the Renewable Fuel Standard. But worries have been mounting that some products labeled as used cooking oil are really cheaper and less sustainable virgin palm oil, an item that is connected with logging and other ecological damage.

The issue entered into focus following a surge in utilized cooking oil exports from Asia in recent years that analysts have actually said includes unrealistically high volumes relative to the quantity of cooking oil used and recovered in the region. 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 eco-friendly fuel manufacturers looking for to make credits under the RFS, he stated.

"EPA has actually conducted audits of sustainable fuel manufacturers since July 2023 that includes, among other things, an examination of the areas that used cooking oil utilized in eco-friendly fuel production was gathered," he said. "These examinations, nevertheless, are ongoing and we are unable to talk about ongoing enforcement examinations."

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

"The Biden administration has actually developed vigorous standards to validate, not simply trust, American manufacturers, and it is vital that the same analysis is applied 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 prompted the administration to omit 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)