By Leah Douglas

Aug 7 (Reuters) - The U.S. Environmental Protection Agency has released investigations into the supply chains of at least two eco-friendly fuel producers amidst market concerns that some might be utilizing fraudulent feedstocks for biodiesel to secure profitable federal government subsidies.

EPA representative Jeffrey Landis informed Reuters that the agency has actually introduced audits over the previous year, but decreased to determine the companies targeted due to the fact that the investigations are continuous.

The production of biodiesel from sustainable active ingredients, like utilized cooking oil, can earn refiners a multitude of state and federal environmental and climate subsidies, including tradable credits under a program administered by the EPA called the Renewable Fuel Standard. But worries have been installing that some supplies labeled as used cooking oil are in fact cheaper and less sustainable virgin palm oil, a product that is related to logging and other environmental damage.

The concern came into focus following a surge in used cooking oil exports from Asia in recent years that experts have said involves unrealistically high volumes relative to the amount of cooking oil used and recuperated in the area. The European Union is likewise investigating feedstocks over the scams concerns.

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

"EPA has conducted audits of sustainable fuel producers because July 2023 that includes, among other things, an evaluation of the areas that utilized cooking oil utilized in renewable fuel production was collected," he said. "These examinations, nevertheless, are continuous and we are not able to talk about continuous enforcement examinations."

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

"The Biden administration has developed vigorous requirements to confirm, not just trust, American producers, and it is necessary that the very same scrutiny is used 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 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)