By Leah Douglas

Aug 7 (Reuters) - The U.S. Environmental Protection Agency has released examinations into the supply chains of at least two eco-friendly fuel manufacturers amid market issues that some may be using fraudulent feedstocks for biodiesel to protect rewarding government subsidies.

EPA representative Jeffrey Landis told Reuters that the company has launched audits over the previous year, however declined to recognize the companies targeted because the investigations are continuous.

The production of biodiesel from sustainable components, like utilized cooking oil, can make refiners a multitude 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 products labeled as used cooking oil are in fact more affordable and less sustainable virgin palm oil, an item that is associated with 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 stated involves unrealistically high volumes relative to the amount of cooking oil used and recuperated in the area. The European Union is also examining feedstocks over the fraud concerns.

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

"EPA has actually conducted audits of eco-friendly fuel producers because July 2023 that includes, to name a few things, an assessment of the locations that utilized cooking oil utilized in renewable fuel production was gathered," he said. "These investigations, however, are ongoing and we are unable to talk about continuous enforcement investigations."

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

"The Biden administration has created vigorous standards to confirm, not just trust, American manufacturers, and it is essential 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 advised 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)