By Leah Douglas

Aug 7 (Reuters) - The U.S. Agency has introduced examinations into the supply chains of a minimum of two renewable fuel manufacturers amid industry issues that some may be utilizing fraudulent feedstocks for biodiesel to secure financially rewarding government subsidies.

EPA spokesperson Jeffrey Landis told Reuters that the firm has introduced audits over the past year, but decreased to determine the companies targeted due to the fact that the investigations are continuous.

The production of biodiesel from sustainable ingredients, like utilized cooking oil, can make refiners a variety of state and federal environmental 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 materials labeled as utilized cooking oil are really less expensive and less sustainable virgin palm oil, an item that is connected with deforestation and other environmental damage.

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

The EPA audits started after the agency updated domestic supply-chain accounting requirements in July 2023 for sustainable fuel manufacturers seeking to make credits under the RFS, he said.

"EPA has actually carried out audits of sustainable fuel producers since July 2023 which includes, to name a few things, an evaluation of the locations that utilized cooking oil utilized in sustainable fuel production was gathered," he said. "These examinations, however, are continuous and we are not able to talk about ongoing enforcement investigations."

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

"The Biden administration has created vigorous requirements to verify, not simply trust, American manufacturers, and it is imperative that the very same scrutiny is applied 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 advised the administration to omit 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)