By Leah Douglas

Aug 7 (Reuters) - The U.S. Environmental Protection Agency has actually released investigations into the supply chains of at least 2 sustainable fuel manufacturers in the middle of industry issues that some might be using fraudulent feedstocks for biodiesel to secure financially rewarding federal government subsidies.

EPA representative Jeffrey Landis informed Reuters that the firm has actually introduced audits over the previous year, however declined to identify the business targeted since the investigations 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 climate aids, including tradable credits under a program administered by the EPA called the Renewable Fuel Standard. But fears have actually been mounting that some products identified as utilized cooking oil are in fact more affordable and less sustainable virgin palm oil, an item that is related to deforestation and other environmental damage.

The issue came into focus following a rise in utilized cooking oil exports from Asia in current years that experts have said involves unrealistically high volumes relative to the quantity of cooking oil used and recovered in the region. The European Union is likewise investigating feedstocks over the scams issues.

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

"EPA has actually conducted audits of sustainable fuel producers since July 2023 which includes, to name a few things, an evaluation of the places that utilized cooking oil utilized in sustainable fuel production was gathered," he said. "These investigations, however, are ongoing and we are not able to talk about continuous enforcement investigations."

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

"The Biden administration has actually developed vigorous requirements to validate, not simply trust, American producers, and it is essential that the same scrutiny is applied to imported feedstocks," six U.S. senators, led by Roger Marshall and Sherrod Brown, composed in a June 20 letter to federal companies.

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