By Leah Douglas

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

EPA representative Jeffrey Landis informed Reuters that the company has actually launched audits over the past year, but declined to recognize the business targeted due to the fact that the examinations 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 more affordable and less sustainable virgin palm oil, an item that is related to deforestation and other environmental damage.

The issue entered into focus following a rise in used cooking oil exports from Asia in recent years that analysts have actually said involves unrealistically high volumes relative to the amount of cooking oil utilized and recuperated in the area. The European Union is likewise investigating feedstocks over the fraud concerns.

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

"EPA has actually carried out audits of sustainable fuel producers given that July 2023 that includes, among other things, an evaluation of the places that used cooking oil used in eco-friendly fuel production was collected," he said. "These examinations, nevertheless, are continuous and we are unable to go over continuous enforcement investigations."

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

"The Biden administration has actually produced energetic requirements to confirm, not simply trust, American producers, and it is essential that the same examination is used to imported feedstocks," six U.S. senators, led by Roger Marshall and Sherrod Brown, wrote 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)