By Leah Douglas

Aug 7 (Reuters) - The U.S. Epa has launched investigations into the supply chains of a minimum of two renewable fuel producers in the middle of market issues that some might be utilizing deceptive feedstocks for biodiesel to secure rewarding federal government subsidies.

EPA representative Jeffrey Landis informed Reuters that the company has launched audits over the previous year, but declined to identify the companies targeted because the investigations are ongoing.

The production of biodiesel from sustainable ingredients, like used cooking oil, can earn refiners a slew of state and federal environmental and climate aids, including tradable credits under a program administered by the EPA called the Renewable Fuel Standard. But fears have been mounting that some materials identified as used cooking oil are really less expensive and less sustainable virgin palm oil, a product that is connected with logging and other ecological damage.

The concern entered focus following a surge in used cooking oil exports from Asia in recent years that analysts have stated involves unrealistically high volumes relative to the quantity of cooking oil used and recuperated in the area. The European Union is also investigating feedstocks over the fraud issues.

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

"EPA has actually performed audits of sustainable fuel manufacturers given that July 2023 which includes, to name a few things, an examination of the areas that utilized cooking oil used in eco-friendly fuel production was collected," he stated. "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 must be as extensive in verifying imports as they are auditing domestic supply chains.

"The Biden administration has developed energetic standards to validate, not simply trust, American producers, and it is imperative that the same analysis is used to imported feedstocks," 6 U.S. senators, led by Roger Marshall and Sherrod Brown, composed 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 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)