By Leah Douglas

Aug 7 (Reuters) - The U.S. Epa has introduced investigations into the supply chains of at least two eco-friendly fuel manufacturers amid market concerns that some may be utilizing fraudulent feedstocks for biodiesel to protect rewarding government subsidies.

EPA spokesperson Jeffrey Landis informed Reuters that the agency has actually introduced audits over the previous year, but declined to determine the companies targeted because the investigations are continuous.

The production of biodiesel from sustainable ingredients, like used cooking oil, can earn refiners a variety of state and federal ecological and climate subsidies, consisting of tradable credits under a program administered by the EPA called the Renewable Fuel Standard. But fears have been installing that some supplies labeled as utilized cooking oil are really cheaper and less sustainable virgin palm oil, a product that is connected with deforestation and other ecological damage.

The issue entered into focus following a surge in used cooking oil exports from Asia recently that analysts have actually said includes unrealistically high volumes relative to the quantity of cooking oil used and recuperated in the area. The European Union is likewise examining feedstocks over the scams concerns.

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

"EPA has performed audits of eco-friendly fuel manufacturers considering that July 2023 that includes, to name a few things, an evaluation of the locations that utilized cooking oil utilized in eco-friendly fuel production was collected," he stated. "These examinations, nevertheless, are ongoing and we are not able to go over continuous enforcement examinations."

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

"The Biden administration has created vigorous standards to confirm, not simply trust, American manufacturers, and it is necessary that the exact same scrutiny is used to imported feedstocks," six 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 extra tidy fuel tax credit program passed in the Inflation Reduction Act. (Reporting by Leah Douglas in Washington Editing by Richard Valdmanis and Matthew Lewis)