By Leah Douglas

Aug 7 (Reuters) - The U.S. Environmental Protection Agency has launched examinations into the supply chains of a minimum of two eco-friendly fuel producers amid market issues that some might be utilizing deceptive feedstocks for biodiesel to secure lucrative government subsidies.

EPA spokesperson Jeffrey Landis informed Reuters that the agency has launched audits over the past year, but declined to determine the business targeted since the examinations are continuous.

The production of biodiesel from sustainable components, like used cooking oil, can make refiners a slew of state and federal ecological 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 supplies labeled as utilized cooking oil are really less and less sustainable virgin palm oil, a product that is connected with deforestation and other ecological damage.

The concern came into focus following a rise in used cooking oil exports from Asia recently that analysts have stated involves unrealistically high volumes relative to the amount of cooking oil used and recuperated in the area. The European Union is also investigating feedstocks over the scams issues.

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

"EPA has performed audits of sustainable fuel manufacturers given that July 2023 that includes, to name a few things, an assessment of the places that used cooking oil utilized in renewable fuel production was collected," he stated. "These examinations, however, are ongoing and we are unable to go over continuous enforcement examinations."

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

"The Biden administration has created vigorous requirements to verify, not just trust, American manufacturers, and it is crucial that the very same scrutiny is applied to imported feedstocks," 6 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 omit imported feedstocks like UCO from an extra tidy fuel tax credit program passed in the Inflation Reduction Act. (Reporting by Leah Douglas in Washington Editing by Richard Valdmanis and Matthew Lewis)