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By Leah Douglas

Aug 7 (Reuters) - The U.S. Environmental Protection Agency has launched investigations into the supply chains of at least 2 eco-friendly fuel manufacturers amidst industry issues that some might be using fraudulent feedstocks for biodiesel to protect lucrative government subsidies.

EPA representative Jeffrey Landis told Reuters that the agency has actually launched audits over the previous year, but decreased to recognize the business targeted since the examinations are continuous.

The production of biodiesel from sustainable active ingredients, like used cooking oil, can earn refiners a multitude of state and federal ecological and environment subsidies, consisting of tradable credits under a program administered by the EPA called the Renewable Fuel Standard. But worries have been installing that some materials identified as oil are really cheaper and less sustainable virgin palm oil, a product that is associated with logging and other environmental damage.

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

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

"EPA has carried out audits of eco-friendly fuel producers because July 2023 which includes, among other things, an assessment of the areas that used cooking oil used in eco-friendly fuel production was collected," he said. "These investigations, however, are continuous and we are not able to discuss ongoing enforcement investigations."

U.S. senators from farm states have called for more oversight of biofuel feedstocks, stating federal companies ought to be as extensive in confirming imports as they are auditing domestic supply chains.

"The Biden administration has actually developed energetic standards to confirm, not just trust, American producers, and it is crucial that the same analysis 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 prompted 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)