By Leah Douglas

Aug 7 (Reuters) - The U.S. Epa has actually introduced investigations into the supply chains of at least 2 eco-friendly fuel producers amid industry concerns that some may be using deceitful feedstocks for biodiesel to secure financially rewarding government aids.

EPA spokesperson Jeffrey Landis told Reuters that the company has actually introduced audits over the previous year, but declined to recognize the business targeted because the examinations are continuous.

The production of biodiesel from sustainable components, like used cooking oil, can earn refiners a multitude of state and federal ecological and climate subsidies, including tradable credits under a program administered by the EPA called the Renewable Fuel Standard. But worries have actually been mounting that some supplies labeled as utilized cooking oil are really cheaper and less sustainable virgin palm oil, a product that is related to logging and other environmental damage.

The issue entered into focus following a surge in utilized cooking oil exports from Asia in the last few years that analysts have actually stated involves unrealistically high volumes relative to the amount of cooking oil used and recovered in the area. The European Union is likewise examining feedstocks over the fraud issues.

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

"EPA has conducted audits of eco-friendly fuel manufacturers because July 2023 which consists of, to name a few things, an assessment of the locations that used cooking oil used in eco-friendly fuel production was gathered," he said. "These examinations, nevertheless, are ongoing and we are unable to talk about continuous enforcement investigations."

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

"The Biden administration has developed vigorous standards to validate, not just trust, American manufacturers, and it is important that the exact same examination is applied to imported feedstocks," six U.S. senators, led by Roger Marshall and Sherrod Brown, composed 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 clean fuel tax credit program passed in the Inflation Reduction Act. (Reporting by Leah Douglas in Washington Editing by Richard Valdmanis and Matthew Lewis)