By Leah Douglas

Aug 7 (Reuters) - The U.S. Epa has released examinations into the supply chains of at least two sustainable fuel manufacturers amid market issues that some might be utilizing fraudulent feedstocks for biodiesel to protect lucrative federal government subsidies.

EPA representative Jeffrey Landis told Reuters that the company has released audits over the previous year, however declined to recognize the companies targeted due to the fact that the examinations are continuous.

The production of biodiesel from sustainable active ingredients, like used cooking oil, can earn refiners a slew of state and federal environmental and environment aids, including tradable credits under a program administered by the EPA called the Renewable Fuel Standard. But worries have been mounting that some materials identified as utilized cooking oil are in fact more affordable and less sustainable virgin palm oil, a product that is associated with logging and other environmental damage.

The problem came into focus following a rise in utilized cooking oil exports from Asia in recent years that analysts have stated involves unrealistically high volumes relative to the amount of cooking oil utilized and recovered in the area. The European Union is likewise examining feedstocks over the fraud concerns.

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

"EPA has actually carried out audits of renewable fuel manufacturers considering that July 2023 which includes, among other things, an examination of the areas that used cooking oil utilized in sustainable fuel production was collected," he stated. "These investigations, nevertheless, are ongoing and we are unable to go over continuous enforcement investigations."

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

"The Biden administration has produced energetic requirements to confirm, not simply trust, American manufacturers, and it is vital that the same scrutiny is applied to imported feedstocks," six U.S. senators, led by Roger Marshall and Sherrod Brown, composed in a June 20 letter to federal companies.

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)