By Leah Douglas

Aug 7 (Reuters) - The U.S. Environmental Protection Agency has introduced investigations into the supply chains of at least two sustainable fuel manufacturers amid market issues that some might be utilizing fraudulent feedstocks for biodiesel to secure profitable federal government aids.

EPA representative Jeffrey Landis told Reuters that the firm has actually released audits over the previous year, however decreased to identify the business targeted since the investigations are ongoing.

The production of biodiesel from sustainable active ingredients, like used cooking oil, can earn refiners a variety of state and federal environmental 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 identified as used cooking oil are actually less expensive and less sustainable virgin palm oil, a product that is associated with logging and other environmental damage.

The issue came into focus following a surge in used cooking oil exports from Asia in recent years that experts have said includes unrealistically high volumes relative to the amount of cooking oil used and recovered in the region. The European Union is likewise examining feedstocks over the scams issues.

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

"EPA has performed audits of eco-friendly fuel producers since July 2023 that includes, amongst other things, an evaluation of the locations that used cooking oil utilized in sustainable fuel production was collected," he said. "These investigations, nevertheless, are continuous and we are unable to discuss continuous enforcement investigations."

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

"The Biden administration has produced energetic requirements to verify, not simply trust, American producers, and it is crucial that the very same analysis is applied to imported feedstocks," six U.S. senators, led by Roger Marshall and Sherrod Brown, wrote in a June 20 letter to federal companies.

Another letter from 15 senators to the Treasury Department on July 30 advised 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)