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By Leah Douglas

Aug 7 (Reuters) - The U.S. Epa has introduced examinations into the supply chains of a minimum of two producers in the middle of industry issues that some may be using deceptive feedstocks for biodiesel to secure lucrative federal government subsidies.

EPA representative Jeffrey Landis informed Reuters that the agency has released audits over the previous year, however decreased to recognize the business targeted since the investigations are continuous.

The production of biodiesel from sustainable active ingredients, like utilized cooking oil, can earn refiners a variety 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 supplies labeled as used cooking oil are in fact more affordable and less sustainable virgin palm oil, a product that is related to deforestation and other ecological damage.

The issue came into focus following a surge in utilized cooking oil exports from Asia over the last few years that analysts have stated involves unrealistically high volumes relative to the quantity of cooking oil utilized and recuperated in the area. The European Union is also investigating feedstocks over the fraud concerns.

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

"EPA has performed audits of eco-friendly fuel producers given that July 2023 which includes, amongst other things, an evaluation of the locations that used cooking oil used in renewable fuel production was collected," he stated. "These investigations, nevertheless, are ongoing and we are unable to discuss ongoing enforcement investigations."

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

"The Biden administration has produced vigorous requirements to validate, not simply trust, American manufacturers, and it is essential that the exact same scrutiny is used to imported feedstocks," six U.S. senators, led by Roger Marshall and Sherrod Brown, composed in a June 20 letter to federal agencies.

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