By Leah Douglas

Aug 7 (Reuters) - The U.S. Epa has actually released examinations 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 financially rewarding federal government subsidies.

EPA representative Jeffrey Landis told Reuters that the company has actually introduced audits over the past year, however declined to identify the business targeted due to the fact that the investigations are ongoing.

The production of biodiesel from sustainable ingredients, like utilized 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 been mounting that some supplies labeled as used cooking oil are really more affordable and less sustainable virgin palm oil, a product that is associated with logging and other ecological damage.

The concern entered focus following a surge in used cooking oil exports from Asia in the last few years that analysts have stated includes unrealistically high volumes relative to the amount of cooking oil used and recuperated in the area. The European Union is also investigating feedstocks over the fraud concerns.

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

"EPA has carried out audits of renewable fuel manufacturers considering that July 2023 that includes, amongst other things, an assessment of the places that utilized cooking oil used in eco-friendly fuel production was collected," he said. "These investigations, nevertheless, are ongoing and we are not able to discuss continuous enforcement investigations."

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

"The Biden administration has actually created vigorous standards to validate, not simply trust, American producers, and it is important 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 leave out 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)