By Leah Douglas

Aug 7 (Reuters) - The U.S. Environmental Protection Agency has launched investigations into the supply chains of at least 2 eco-friendly fuel producers amid market concerns that some may be utilizing deceptive feedstocks for biodiesel to secure profitable government aids.

EPA spokesperson Jeffrey Landis told Reuters that the company has actually released audits over the previous year, but decreased to determine the business targeted because the examinations are continuous.

The production of biodiesel from sustainable components, like used cooking oil, can earn 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 worries have actually been mounting that some materials labeled as used cooking oil are actually cheaper and less sustainable virgin palm oil, a product that is connected with logging and other environmental damage.

The problem entered focus following a surge in used cooking oil exports from Asia in the last few years that analysts have actually stated involves unrealistically high volumes relative to the quantity of cooking oil utilized 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 eco-friendly fuel producers looking for to earn credits under the RFS, he said.

"EPA has actually carried out audits of eco-friendly fuel producers because July 2023 which consists of, among other things, an examination of the areas that used cooking oil used in sustainable fuel production was collected," he said. "These examinations, however, are ongoing and we are not able to go over ongoing enforcement examinations."

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

"The Biden administration has actually created energetic standards to confirm, not just trust, American manufacturers, and it is necessary that the very same examination is used to imported feedstocks," 6 U.S. senators, led by Roger Marshall and Sherrod Brown, composed in a June 20 letter to federal companies.

Another letter from 15 senators to the Treasury Department on July 30 urged the administration to omit 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 Lewis)