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By Leah Douglas

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

EPA spokesperson Jeffrey Landis told Reuters that the company has released audits over the previous year, however decreased to recognize the companies targeted due to the fact that the investigations are ongoing.

The production of biodiesel from sustainable ingredients, like used cooking oil, can make refiners a multitude of state and federal environmental and environment 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 products labeled as utilized cooking oil are really more affordable and less sustainable virgin palm oil, an item that is related to logging and other ecological damage.

The problem came into focus following a surge in utilized cooking oil exports from Asia in recent years that experts have said involves unrealistically high volumes relative to the quantity of cooking oil used and recovered in the area. The European Union is also examining feedstocks over the scams issues.

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

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

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

"The Biden administration has actually developed vigorous standards to confirm, not just trust, American producers, and it is crucial 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 exclude 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 Lewis)