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By Leah Douglas

Aug 7 (Reuters) - The U.S. Environmental Protection Agency has launched investigations into the supply chains of a minimum of 2 sustainable fuel manufacturers in the middle of industry concerns that some may be using fraudulent feedstocks for biodiesel to protect rewarding government subsidies.

EPA spokesperson Jeffrey Landis informed Reuters that the agency has actually released audits over the past year, but decreased to identify the companies targeted since the examinations are continuous.

The production of biodiesel from sustainable components, like utilized 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 actually been installing that some supplies labeled as used cooking oil are actually more affordable and less sustainable virgin palm oil, an item that is related to logging and other environmental 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 involves unrealistically high volumes relative to the amount of cooking oil used and recovered in the region. The European Union is likewise examining feedstocks over the scams issues.

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

"EPA has actually carried out audits of renewable fuel manufacturers considering that July 2023 which includes, to name a few things, an evaluation of the areas that utilized cooking oil utilized in renewable fuel production was gathered," he stated. "These investigations, however, are continuous and we are not able to discuss continuous enforcement investigations."

U.S. senators from farm states have actually called for more oversight of biofuel feedstocks, stating federal agencies must be as extensive in validating imports as they are auditing domestic supply chains.

"The Biden administration has actually created vigorous standards to confirm, not just trust, American manufacturers, and it is essential 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 firms.

Another letter from 15 senators to the Treasury Department on July 30 prompted 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 Matthew Lewis)