By Leah Douglas

Aug 7 (Reuters) - The U.S. Environmental Protection Agency has actually introduced investigations into the supply chains of a minimum of 2 renewable fuel producers amid market concerns that some might be using fraudulent feedstocks for biodiesel to protect lucrative government aids.

EPA spokesperson Jeffrey Landis informed Reuters that the company has actually introduced audits over the previous year, but declined to identify the business targeted since the examinations are ongoing.

The production of biodiesel from components, like used cooking oil, can make refiners a multitude of state and federal ecological 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 actually cheaper and less sustainable virgin palm oil, a product that is related to deforestation and other ecological damage.

The problem came into focus following a surge in used cooking oil exports from Asia recently that experts have said includes unrealistically high volumes relative to the quantity of cooking oil used and recovered in the area. The European Union is also investigating feedstocks over the scams concerns.

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

"EPA has conducted audits of sustainable fuel producers considering that July 2023 which consists of, to name a few things, an examination of the locations that utilized cooking oil utilized in sustainable fuel production was collected,” he stated. “These examinations, however, are continuous and we are not able to talk about continuous enforcement investigations.“

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

"The Biden administration has actually created vigorous standards to confirm, not just trust, American producers, and it is essential that the 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 Treasury Department on July 30 advised 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)