By Leah Douglas

Aug 7 (Reuters) - The U.S. Epa has launched examinations into the supply chains of at least two renewable fuel producers in the middle of industry concerns that some may be using fraudulent feedstocks for biodiesel to secure rewarding federal government subsidies.

EPA representative Jeffrey Landis informed Reuters that the agency has actually launched audits over the past year, but declined to identify the business targeted due to the fact that the investigations are ongoing.

The production of biodiesel from sustainable components, like utilized cooking oil, can make refiners a slew of state and federal environmental and climate aids, consisting of tradable credits under a program administered by the EPA called the Renewable Fuel Standard. But worries have actually been mounting that some materials labeled as used cooking oil are actually less expensive and less sustainable virgin palm oil, a product that is related to deforestation and other ecological damage.

The concern entered focus following a rise in utilized cooking oil exports from Asia in the last few years that analysts have actually said includes unrealistically high volumes relative to the quantity of cooking oil utilized and recovered in the area. The European Union is likewise examining feedstocks over the fraud issues.

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

"EPA has actually conducted audits of sustainable fuel producers because July 2023 that includes, to name a few things, an evaluation of the places that utilized cooking oil used in renewable fuel production was collected," he said. "These examinations, however, are continuous and we are not able to discuss continuous enforcement investigations."

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

"The Biden administration has actually produced energetic requirements to confirm, not simply trust, American manufacturers, 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, 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 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)