By Leah Douglas

Aug 7 (Reuters) - The U.S. Environmental Protection Agency has actually launched investigations into the supply chains of a minimum of two renewable fuel producers amid market issues that some might be utilizing fraudulent feedstocks for biodiesel to secure profitable government subsidies.

EPA representative Jeffrey Landis told Reuters that the company has actually launched audits over the previous year, however decreased to recognize the business targeted because the investigations are ongoing.

The production of biodiesel from sustainable components, like used cooking oil, can make refiners a variety of state and federal environmental and environment subsidies, including tradable credits under a program administered by the EPA called the Renewable Fuel Standard. But fears have been installing that some products labeled as utilized cooking oil are in fact less expensive and less sustainable virgin palm oil, a product that is connected with logging and other environmental damage.

The issue entered focus following a surge in utilized cooking oil exports from Asia in current years that experts have stated involves unrealistically high volumes relative to the quantity of cooking oil used and recuperated in the region. The European Union is also investigating feedstocks over the fraud concerns.

The EPA audits started after the company upgraded domestic supply-chain accounting requirements in July 2023 for renewable fuel producers seeking to earn credits under the RFS, he said.

"EPA has conducted audits of eco-friendly fuel producers because July 2023 which consists of, to name a few things, an assessment of the places that used cooking oil utilized in eco-friendly fuel production was collected," he stated. "These examinations, however, are continuous and we are not able to discuss continuous enforcement examinations."

U.S. senators from farm states have actually required more oversight of biofuel feedstocks, stating federal firms ought to be as extensive in validating imports 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 very same analysis is used 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 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)