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U.S. EPA Investigates Biodiesel Supply Chains as Concerns Grow on Feedstock Sources

As on 15 August 2024

Introduction:

The U.S. Environmental Protection Agency (EPA) has launched investigations into the supply chains of at least two renewable fuel producers amid industry concerns that some may be using fraudulent feedstocks for biodiesel to secure lucrative government subsidies. The action by the EPA comes as farm groups and a growing number of lawmakers press the government to address worries that Used Cooking Oil (UCO), a valuable ingredient for making renewable fuels, could be fraudulent.

The Investigation:

The investigations primarily focus on auditing UCO supply chains of domestic renewable fuel / biofuel producers to verify whether the feedstock qualifies under the Renewable Fuel Standard (RFS).

The audits seek to track the source of the UCO following the suspicions that the UCO supply entering from Asia may not be authentic and is instead being mixed with fresh vegetable oils, such as palm oil, which is potentially distorting commodity values and undermining US biofuel laws.

Palm Oil, one of the world’s most widely used vegetable oils, is a significant pain point to environmentalists and many countries because the industry is tied to labor abuses and is a key driver of deforestation and environmental damage.

The production of biodiesel from sustainable ingredients can earn refiners a string of state and federal environmental and climate subsidies, including tradable credits under the RFS programme. But the mounting fears that the supplies/renewable fuel sources are tainted with much less sustainable virgin palm oil would sit in violation of the RFS programme.

In similar news reported, governments in France, Germany and the Netherlands also recently called on the European Union (EU) to adopt stricter checks on overseas suppliers of biofuel as the EU investigates allegations of fraud in imports from Asia. This too arose from concerns on whether the fuel can be truly deemed certifiably sustainable, given the adverse environmental damage caused through their actual harvesting practices.

Conclusion:

While the EPA investigations are ongoing and yet to be concluded, this latest probe by the U.S. EPA is reflective of the prevalent global shift towards driving robust sustainable practices across borders and industries. To achieve justifiable sustainability, upholding sustainability standards in every aspect of the supply chain is central to the core principles of programmes such as the RFS.

Sources: EPA Probes Biodiesel Supply Chains as Fraud Concerns Mount – BNN Bloomberg | Exclusive: US EPA says it is auditing biofuel producers' used cooking oil supply | ReutersEPA probes US biofuel producers' UCO supplies | Latest Market News (argusmedia.com) | France, Germany urge tougher EU checks on biofuel imports in fraud probe | Reuters

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