By Leah Douglas

Aug 7 (Reuters) - The U.S. Environmental Protection Agency has into the supply chains of at least 2 renewable fuel manufacturers amidst market concerns that some may be using fraudulent feedstocks for biodiesel to protect rewarding federal government subsidies.

EPA spokesperson Jeffrey Landis informed Reuters that the firm has introduced audits over the previous year, however declined to identify the companies targeted since the examinations are continuous.

The production of biodiesel from sustainable components, like used cooking oil, can earn refiners a slew of state and federal ecological and environment subsidies, including tradable credits under a program administered by the EPA called the Renewable Fuel Standard. But worries have been mounting that some supplies identified as utilized cooking oil are really less expensive and less sustainable virgin palm oil, an item that is associated with logging and other environmental damage.

The issue entered focus following a rise in used cooking oil exports from Asia in the last few years that analysts have actually said includes unrealistically high volumes relative to the amount of cooking oil utilized and recovered in the region. The European Union is likewise investigating feedstocks over the fraud issues.

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

"EPA has actually performed audits of eco-friendly fuel producers given that July 2023 which includes, to name a few things, an examination of the locations that used cooking oil used in renewable fuel production was gathered," he said. "These investigations, nevertheless, are continuous and we are unable to discuss continuous enforcement examinations."

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

"The Biden administration has developed energetic requirements to confirm, not just trust, American manufacturers, and it is necessary that the same examination is used to imported feedstocks," 6 U.S. senators, led by Roger Marshall and Sherrod Brown, wrote in a June 20 letter to federal agencies.

Another letter from 15 senators to the Treasury Department on July 30 advised 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)