By Leah Douglas

Aug 7 (Reuters) - The U.S. Agency has actually launched investigations into the supply chains of at least 2 renewable fuel producers amidst industry issues that some may be using deceptive feedstocks for biodiesel to secure profitable government aids.

EPA spokesperson Jeffrey Landis told Reuters that the agency has introduced audits over the past year, however declined to identify the companies targeted because the investigations are continuous.

The production of biodiesel from sustainable ingredients, like used cooking oil, can earn refiners a variety of state and federal environmental and environment subsidies, consisting of tradable credits under a program administered by the EPA called the Renewable Fuel Standard. But worries have actually been installing that some supplies 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 came into focus following a surge in used cooking oil exports from Asia over the last few years that analysts have stated involves unrealistically high volumes relative to the quantity of cooking oil utilized and recovered in the region. The European Union is also examining feedstocks over the fraud concerns.

The EPA audits started after the agency updated domestic supply-chain accounting requirements in July 2023 for sustainable fuel producers looking for to make credits under the RFS, he stated.

"EPA has actually conducted audits of renewable fuel manufacturers considering that July 2023 which includes, to name a few things, an evaluation of the places that used cooking oil utilized in eco-friendly fuel production was collected," he said. "These investigations, however, are ongoing and we are unable to talk about ongoing enforcement examinations."

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

"The Biden administration has actually developed vigorous requirements to confirm, not simply trust, American manufacturers, and it is vital that the very same scrutiny is applied to imported feedstocks," 6 U.S. senators, led by Roger Marshall and Sherrod Brown, composed in a June 20 letter to federal agencies.

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