By Leah Douglas

Aug 7 (Reuters) - The U.S. Environmental Protection Agency has actually released examinations into the supply chains of at least two sustainable fuel producers amidst industry issues that some might be utilizing fraudulent feedstocks for biodiesel to protect financially rewarding federal government aids.

EPA representative Jeffrey Landis told Reuters that the firm has released audits over the previous year, however declined to identify the companies targeted because the examinations are ongoing.

The production of biodiesel from sustainable active ingredients, like used cooking oil, can make refiners a slew of state and federal environmental 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 materials labeled as used cooking oil are really more affordable and less sustainable virgin palm oil, a product that is related to deforestation and other ecological damage.

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

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

"EPA has carried out audits of eco-friendly fuel producers considering that July 2023 which consists of, to name a few things, an assessment of the areas that utilized cooking oil used in sustainable fuel production was collected," he stated. "These examinations, nevertheless, are ongoing and we are not able to discuss ongoing enforcement investigations."

U.S. senators from farm states have actually required more oversight of feedstocks, stating federal firms must be as rigorous in validating imports as they are auditing domestic supply chains.

"The Biden administration has actually created energetic requirements to confirm, not just trust, American manufacturers, and it is imperative that the very same analysis is used to imported feedstocks," 6 U.S. senators, led by Roger Marshall and Sherrod Brown, wrote in a June 20 letter to federal agencies.

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