By Leah Douglas

Aug 7 (Reuters) - The U.S. Environmental Protection Agency has launched investigations into the supply chains of a minimum of 2 sustainable fuel manufacturers in the middle of market issues 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 launched audits over the past year, but declined to recognize the companies targeted since the investigations are continuous.

The production of biodiesel from sustainable active ingredients, like used cooking oil, can make refiners a variety 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 installing that some supplies labeled as used cooking oil are in fact cheaper and less sustainable virgin palm oil, an item that is related to logging and other ecological damage.

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

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

"EPA has performed audits of renewable fuel manufacturers since July 2023 which consists of, amongst other things, an assessment of the places that utilized cooking oil used in eco-friendly fuel production was collected," he stated. "These examinations, however, are ongoing and we are not able to go over continuous enforcement investigations."

U.S. senators from farm states have required more oversight of biofuel feedstocks, stating federal companies ought to be as rigorous in confirming imports as they are auditing domestic supply chains.

"The Biden administration has produced vigorous requirements to verify, not simply trust, American manufacturers, and it is vital that the same analysis is applied 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 to the Treasury Department on July 30 advised 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)