By Leah Douglas

Aug 7 (Reuters) - The U.S. Epa has actually released examinations into the supply chains of a minimum of two sustainable fuel producers in the middle of market concerns that some may be utilizing fraudulent feedstocks for biodiesel to secure financially rewarding government subsidies.

EPA spokesperson Jeffrey Landis informed Reuters that the agency has introduced audits over the past year, however decreased to recognize the business targeted because the examinations are ongoing.

The production of biodiesel from sustainable active ingredients, like utilized cooking oil, can earn refiners a variety of state and federal environmental and environment aids, consisting of tradable credits under a program administered by the EPA called the Renewable Fuel Standard. But fears have been mounting that some products identified as used cooking oil are in fact cheaper and less sustainable virgin palm oil, an item that is connected with logging and other environmental damage.

The problem entered focus following a rise in used cooking oil exports from Asia in the last few years that analysts have actually said involves unrealistically high volumes relative to the quantity of cooking oil used and recovered in the area. The European Union is also examining feedstocks over the scams issues.

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

"EPA has carried out audits of eco-friendly fuel producers because July 2023 which consists of, to name a few things, an evaluation of the places that used cooking oil used in renewable fuel production was collected," he said. "These examinations, nevertheless, are ongoing and we are not able to discuss ongoing enforcement investigations."

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

"The Biden administration has created energetic standards to validate, not just trust, American manufacturers, and it is crucial that the exact 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)