By Leah Douglas

Aug 7 (Reuters) - The U.S. Environmental Protection Agency has introduced examinations into the supply chains of at least 2 sustainable fuel producers amid industry concerns that some might be utilizing fraudulent feedstocks for biodiesel to protect lucrative government subsidies.

EPA representative Jeffrey Landis told Reuters that the firm has introduced audits over the past year, however declined to determine the business targeted since the investigations are ongoing.

The production of biodiesel from sustainable active ingredients, like used cooking oil, can earn refiners a multitude 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 fears have been mounting that some products labeled as used cooking oil are actually less expensive and less sustainable virgin palm oil, an item that is connected with logging and other environmental damage.

The issue entered into focus following a surge in used cooking oil exports from Asia over the last few years that experts have said includes unrealistically high volumes relative to the quantity of cooking oil used and recuperated in the region. The European Union is likewise examining feedstocks over the scams concerns.

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

"EPA has performed audits of renewable fuel producers given that July 2023 which consists of, to name a few things, an evaluation of the areas that used cooking oil utilized in sustainable fuel production was gathered," he said. "These examinations, however, are continuous and we are not able to go over continuous enforcement examinations."

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

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

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