By Leah Douglas

Aug 7 (Reuters) - The U.S. Environmental Protection Agency has launched examinations into the supply chains of a minimum of two eco-friendly fuel manufacturers amid market issues that some might be utilizing fraudulent feedstocks for biodiesel to secure financially rewarding federal government aids.

EPA spokesperson Jeffrey Landis informed Reuters that the firm has introduced audits over the past year, however declined to identify the business targeted due to the fact that the examinations are continuous.

The production of biodiesel from sustainable active ingredients, like utilized 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 installing that some materials labeled as utilized cooking oil are actually more affordable and less sustainable virgin palm oil, a product that is associated with deforestation and other ecological damage.

The problem entered focus following a rise in used cooking oil exports from Asia recently that analysts have actually said includes unrealistically high volumes relative to the quantity of cooking oil utilized and recuperated in the region. The European Union is also investigating feedstocks over the scams issues.

The EPA audits began after the company upgraded domestic supply-chain accounting requirements in July 2023 for eco-friendly fuel producers looking for to make credits under the RFS, he stated.

"EPA has actually conducted audits of eco-friendly fuel manufacturers considering that July 2023 which consists of, among other things, an assessment of the areas that used cooking oil used in sustainable fuel production was gathered," he said. "These examinations, however, are ongoing and we are not able to go over ongoing enforcement examinations."

U.S. senators from farm states have actually called for more oversight of biofuel feedstocks, stating federal agencies should be as extensive in validating imports as they are auditing domestic supply chains.

"The Biden administration has created energetic standards to verify, not simply trust, American manufacturers, and it is essential that the exact 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 firms.

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