By Leah Douglas

Aug 7 (Reuters) - The U.S. Epa has launched investigations into the supply chains of a minimum of two eco-friendly fuel producers amid industry concerns that some might be utilizing deceitful feedstocks for biodiesel to protect rewarding federal government aids.

EPA representative Jeffrey Landis informed Reuters that the company has launched audits over the previous year, however decreased to determine the companies targeted since the examinations are continuous.

The production of biodiesel from sustainable active ingredients, like used cooking oil, can make refiners a multitude of state and federal environmental and climate 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 used cooking oil are really more affordable and less sustainable virgin palm oil, a product that is connected with deforestation and other ecological damage.

The problem entered focus following a surge in used cooking oil exports from Asia in the last few years that experts have actually said includes unrealistically high volumes relative to the amount of cooking oil used and recovered in the area. The European Union is likewise examining feedstocks over the fraud concerns.

The EPA audits began after the company upgraded domestic supply-chain accounting requirements in July 2023 for eco-friendly fuel manufacturers seeking to earn credits under the RFS, he said.

"EPA has actually conducted audits of renewable fuel producers considering that July 2023 which consists of, to name a few things, an examination of the areas that utilized cooking oil used in sustainable fuel production was collected," he said. "These investigations, however, are ongoing and we are not able to discuss continuous enforcement investigations."

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

"The Biden administration has created vigorous requirements to validate, not just trust, American producers, and it is imperative 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 urged the administration to omit 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)