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By Leah Douglas

Aug 7 (Reuters) - The U.S. Environmental Protection Agency has launched investigations into the supply chains of a minimum of two eco-friendly fuel producers amid market concerns that some may be utilizing fraudulent feedstocks for biodiesel to protect rewarding government aids.

EPA spokesperson Jeffrey Landis told Reuters that the firm has launched audits over the past year, however decreased to recognize the business targeted due to the fact that the investigations are continuous.

The production of biodiesel from sustainable active ingredients, like used cooking oil, can make refiners a slew 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 actually been installing that some materials labeled as utilized cooking oil are really less expensive and less sustainable virgin palm oil, an item that is associated with logging and other environmental damage.

The problem came into focus following a surge in utilized cooking oil exports from Asia recently that analysts have said includes unrealistically high volumes relative to the amount of cooking oil used and recovered in the region. The European Union is likewise examining feedstocks over the scams concerns.

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

"EPA has carried out audits of eco-friendly fuel producers given that July 2023 that includes, to name a few things, an assessment of the areas that used cooking oil used in eco-friendly fuel production was collected," he stated. "These investigations, however, are ongoing and we are not able to go over ongoing enforcement examinations."

U.S. senators from farm states have required more oversight of biofuel feedstocks, stating federal agencies must be as rigorous in as they are auditing domestic supply chains.

"The Biden administration has actually created energetic requirements to verify, not just trust, American manufacturers, and it is necessary that the exact same scrutiny 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 urged the administration to exclude imported feedstocks like UCO from an extra clean fuel tax credit program passed in the Inflation Reduction Act. (Reporting by Leah Douglas in Washington Editing by Richard Valdmanis and Matthew Lewis)