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By Leah Douglas

Aug 7 (Reuters) - The U.S. Environmental Protection Agency has launched examinations into the supply chains of at least two eco-friendly fuel manufacturers amid market issues that some may be using fraudulent feedstocks for biodiesel to secure rewarding federal government aids.

EPA representative Jeffrey Landis informed Reuters that the firm has actually introduced audits over the past year, but declined to recognize the companies targeted since the investigations are continuous.

The production of biodiesel from sustainable active ingredients, like used cooking oil, can earn refiners a multitude of state and federal environmental and climate aids, including tradable credits under a program administered by the EPA called the Renewable Fuel Standard. But worries have actually been mounting that some supplies labeled as used cooking oil are really cheaper and less sustainable virgin palm oil, an item that is related to deforestation and other ecological damage.

The issue came into focus following a surge in utilized cooking oil exports from Asia in current years that analysts have stated includes unrealistically high volumes relative to the amount of cooking oil used and recuperated in the area. The European Union is likewise investigating feedstocks over the fraud issues.

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

"EPA has actually performed audits of eco-friendly fuel manufacturers given that July 2023 which includes, amongst other things, an assessment of the areas that used cooking oil utilized in eco-friendly fuel production was gathered," he said. "These investigations, nevertheless, are continuous and we are unable to discuss continuous enforcement examinations."

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

"The Biden administration has developed energetic requirements to verify, not just trust, American producers, and it is important that the very same analysis 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 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)