EPA launches investigation into possible fraud within the biofuels industry

The Environmental Protection Agency is investigating two renewable fuel producers over concerns that the biofuels industry is using fraudulent feedstocks to secure lucrative government subsidies. 

The EPA initiated audits against biofuels producers over the past year, Reuters reported Wednesday. The agency didn’t specify which companies were being audited, as the investigation is ongoing.

Refiners can earn state and federal climate subsidies, including tradable credits under the Renewable Fuel Standard, for the production of biofuels from sustainable sources, such as used cooking oil.

Concerns have been raised that some biofuels are labeled as being produced from cooking oil, but are actually using cheaper and less sustainable virgin palm oil. 

The European Union is also investigating feedstocks, Reuters reports, over the fraud concerns.