By Leah Douglas

Aug 7 (Reuters) - The U.S. Environmental Protection Agency has released investigations into the supply chains of at least two sustainable fuel producers amidst market issues that some may be using fraudulent feedstocks for biodiesel to protect rewarding government aids.

EPA spokesperson Jeffrey Landis told Reuters that the agency has introduced audits over the past year, however decreased to identify the companies targeted since the examinations are continuous.

The production of biodiesel from sustainable ingredients, like used cooking oil, can make 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 fears have been installing that some materials identified as oil are actually cheaper and less sustainable virgin palm oil, an item that is connected with logging and other environmental damage.

The issue entered focus following a rise in used cooking oil exports from Asia in recent years that experts have actually stated includes unrealistically high volumes relative to the amount of cooking oil utilized and recovered in the region. The European Union is likewise investigating feedstocks over the fraud concerns.

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

“EPA has conducted audits of eco-friendly fuel manufacturers since July 2023 which includes, amongst other things, an examination of the locations that utilized cooking oil utilized in sustainable fuel production was collected,” he stated. “These examinations, nevertheless, are ongoing and we are unable to go over continuous enforcement investigations.”

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

“The Biden administration has actually created vigorous requirements to validate, not simply trust, American manufacturers, and it is essential that the very same examination is applied to imported feedstocks,” 6 U.S. senators, led by Roger Marshall and Sherrod Brown, composed in a June 20 letter to federal agencies.

Another letter from 15 senators to the Treasury Department on July 30 urged the administration to leave out 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)