By Leah Douglas

Aug 7 (Reuters) - The U.S. Environmental Protection Agency has released examinations into the supply chains of at least two eco-friendly fuel manufacturers in the middle of industry issues that some might be utilizing deceptive feedstocks for biodiesel to protect rewarding federal government subsidies.

EPA spokesperson Jeffrey Landis informed Reuters that the company has actually launched audits over the past year, however decreased to determine the companies targeted due to the fact that the investigations are ongoing.

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

The concern entered focus following a surge in utilized cooking oil exports from Asia over the last few years that analysts have actually said involves unrealistically high volumes relative to the amount of cooking oil utilized and recuperated in the region. The European Union is also examining feedstocks over the fraud concerns.

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

"EPA has performed audits of renewable fuel producers because July 2023 which includes, among other things, an assessment of the locations that used cooking oil used in renewable fuel production was collected," he said. "These investigations, nevertheless, are continuous and we are unable to talk about ongoing enforcement investigations."

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

"The Biden administration has actually created vigorous requirements to validate, not just trust, American producers, and it is vital 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 agencies.

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 clean fuel tax credit program passed in the Inflation Reduction Act. (Reporting by Leah Douglas in Washington Editing by Richard Valdmanis and Matthew Lewis)