By Leah Douglas

Aug 7 (Reuters) - The U.S. Epa has actually launched investigations into the supply chains of a minimum of two eco-friendly fuel manufacturers amid market issues that some might be using deceitful feedstocks for biodiesel to protect profitable federal government aids.

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

The production of biodiesel from sustainable components, like utilized cooking oil, can make refiners a slew of state and federal ecological and climate subsidies, including tradable credits under a program administered by the EPA called the Renewable Fuel Standard. But worries have actually been mounting that some products identified as utilized cooking oil are in fact less expensive and less sustainable virgin palm oil, an item that is connected with deforestation and other environmental damage.

The issue entered focus following a surge in utilized cooking oil exports from Asia in the last few years that analysts have said involves unrealistically high volumes relative to the amount of cooking oil used 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 sustainable fuel manufacturers seeking to make credits under the RFS, he said.

"EPA has performed audits of eco-friendly fuel manufacturers considering that July 2023 which includes, to name a few things, an assessment of the places that used cooking oil utilized in sustainable fuel production was collected," he said. "These investigations, nevertheless, are continuous and we are not able to go over continuous enforcement investigations."

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

"The Biden administration has actually produced vigorous standards to confirm, not simply trust, American manufacturers, and it is important that the exact same examination is used 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 prompted the administration to exclude imported feedstocks like UCO from an extra clean fuel tax credit program passed in the Inflation Reduction Act. (Reporting by Leah Douglas in Washington Editing by Richard Valdmanis and Matthew Lewis)