By Leah Douglas

Aug 7 (Reuters) - The U.S. Environmental Protection Agency has actually launched examinations into the supply chains of at least 2 eco-friendly fuel producers amid industry concerns that some might be utilizing fraudulent feedstocks for biodiesel to protect rewarding federal government subsidies.

EPA spokesperson Jeffrey Landis informed Reuters that the company has actually launched audits over the past year, but declined to identify the business targeted because the examinations are ongoing.

The production of biodiesel from sustainable active ingredients, like used cooking oil, can make refiners a variety 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 been mounting that some products labeled as utilized cooking oil are actually more affordable and less sustainable virgin palm oil, an item that is connected with deforestation and other ecological damage.

The problem came into focus following a rise in used cooking oil exports from Asia recently that analysts have said involves unrealistically high volumes relative to the quantity of cooking oil utilized and recuperated in the area. The European Union is likewise examining feedstocks over the fraud concerns.

The EPA audits began after the company upgraded domestic supply-chain accounting requirements in July 2023 for eco-friendly fuel producers looking for to make credits under the RFS, he stated.

"EPA has performed audits of sustainable fuel manufacturers because July 2023 which consists of, amongst other things, an examination of the places that used cooking oil utilized in renewable fuel production was collected," he said. "These examinations, nevertheless, are continuous and we are unable to go over continuous enforcement examinations."

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

"The Biden administration has actually produced energetic standards to confirm, not just trust, American manufacturers, and it is essential that the same scrutiny is used to imported feedstocks," 6 U.S. senators, led by Roger Marshall and Sherrod Brown, wrote in a June 20 letter to federal agencies.

Another letter from 15 senators to the Treasury Department on July 30 prompted the administration to exclude imported feedstocks like UCO from an additional tidy fuel tax credit program passed in the Inflation Reduction Act. (Reporting by Leah Douglas in Washington Editing by Richard Valdmanis and Matthew Lewis)