By Leah Douglas

Aug 7 (Reuters) - The U.S. Epa has actually launched investigations into the supply chains of a minimum of 2 sustainable fuel producers amidst market issues that some might be utilizing deceptive feedstocks for biodiesel to secure financially rewarding federal government subsidies.

EPA spokesperson Jeffrey Landis told Reuters that the agency has introduced audits over the previous year, however declined to identify the business targeted since the examinations are ongoing.

The production of biodiesel from sustainable components, like utilized cooking oil, can earn refiners a multitude of state and federal ecological and climate aids, including tradable credits under a program administered by the EPA called the Renewable Fuel Standard. But worries have been installing that some products labeled as utilized cooking oil are actually more affordable and less sustainable virgin palm oil, an item that is related to deforestation and other ecological damage.

The problem entered into focus following a rise in used cooking oil exports from Asia in current years that experts have said involves unrealistically high volumes relative to the amount of cooking oil used and recuperated in the region. The European Union is also investigating feedstocks over the scams issues.

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

"EPA has conducted audits of renewable fuel producers since July 2023 that includes, among other things, an assessment of the places that used cooking oil utilized in renewable fuel production was collected," he stated. "These examinations, nevertheless, are continuous and we are not able to talk about ongoing enforcement investigations."

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

"The Biden administration has developed energetic standards to validate, not just trust, American producers, and it is important that the same examination is used to imported feedstocks," six U.S. senators, led by Roger Marshall and Sherrod Brown, composed in a June 20 letter to federal firms.

Another letter from 15 senators to the Treasury Department on July 30 prompted the administration to exclude imported feedstocks like UCO from an additional tidy fuel tax credit program passed in the Inflation Reduction Act. (Reporting by Leah Douglas in Washington Editing by Richard Valdmanis and Matthew Lewis)