By Leah Douglas

Aug 7 (Reuters) - The U.S. Environmental Protection Agency has introduced investigations into the supply chains of at least two renewable fuel producers amidst market issues that some might be using fraudulent feedstocks for biodiesel to protect financially rewarding government subsidies.

EPA spokesperson Jeffrey Landis told Reuters that the firm has actually introduced audits over the previous year, but decreased to recognize 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 multitude 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 have been installing that some materials identified as used cooking oil are actually less expensive and less sustainable virgin palm oil, a product that is associated with logging and other ecological damage.

The concern came into focus following a surge in utilized cooking oil exports from Asia recently that experts have actually said involves unrealistically high volumes relative to the amount of cooking oil utilized and recuperated in the area. The European Union is also investigating feedstocks over the scams 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 make credits under the RFS, he said.

"EPA has performed audits of eco-friendly fuel manufacturers since July 2023 that includes, to name a few things, an evaluation of the areas that used cooking oil utilized in renewable fuel production was gathered," he stated. "These investigations, nevertheless, are ongoing and we are not able to discuss continuous enforcement examinations."

U.S. senators from farm states have actually required more oversight of biofuel feedstocks, saying federal firms ought to be as rigorous in confirming imports as they are auditing domestic supply chains.

"The Biden administration has actually produced vigorous requirements to confirm, not just trust, American producers, and it is crucial that the very 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 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)