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By Leah Douglas

Aug 7 (Reuters) - The U.S. Epa has actually launched investigations into the supply chains of a minimum of two sustainable fuel producers amid market issues that some may be using fraudulent feedstocks for biodiesel to secure lucrative government aids.

EPA representative Jeffrey Landis informed Reuters that the agency has launched audits over the past year, but declined to recognize the companies targeted because the investigations are continuous.

The production of biodiesel from sustainable components, like utilized cooking oil, can earn refiners a multitude of state and federal environmental and climate aids, including tradable under a program administered by the EPA called the Renewable Fuel Standard. But worries have actually been installing that some materials identified as utilized cooking oil are really more affordable and less sustainable virgin palm oil, an item that is related to deforestation and other ecological damage.

The concern entered into focus following a surge in utilized cooking oil exports from Asia in the last few years that experts have actually stated involves unrealistically high volumes relative to the amount of cooking oil utilized and recovered in the region. The European Union is also examining feedstocks over the fraud issues.

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

"EPA has performed audits of renewable fuel manufacturers since July 2023 which consists of, among other things, an assessment of the places that utilized cooking oil utilized in sustainable fuel production was collected," he stated. "These investigations, however, are ongoing and we are not able to discuss ongoing enforcement investigations."

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

"The Biden administration has created vigorous requirements to confirm, not just trust, American manufacturers, and it is imperative that the very same scrutiny is used to imported feedstocks," six U.S. senators, led by Roger Marshall and Sherrod Brown, composed in a June 20 letter to federal firms.

Another letter from 15 senators to the Treasury Department on July 30 advised the administration to omit imported feedstocks like UCO from an extra tidy fuel tax credit program passed in the Inflation Reduction Act. (Reporting by Leah Douglas in Washington Editing by Richard Valdmanis and Matthew Lewis)