The Environmental Protection Agency’s 2022 revisions to the Renewable Fuel Standard (RFS2) have brought a sharper, and arguably overdue, focus on the traceability of soybean oil used in biodiesel production. While the broad outlines of the RFS2, introduced back in 2018, were familiar to most stakeholders, these latest adjustments—particularly the call for explicit, documented traceability—are forcing supply chains to adapt in ways that may feel both disruptive and, in some quarters, long anticipated. There’s a sense among many producers that the regulatory environment is simply catching up with what responsible operators had already been inching towards. Yet the practicalities of compliance are far from trivial.
At the heart of this shift lies the requirement that producers of soybean-based biodiesel must now demonstrate, with real precision, where their feedstock comes from. It’s not enough anymore to source soybean oil through long-standing supplier networks and assume general compliance. The EPA’s new emphasis means producers are expected to provide verifiable data on the origins of their feedstock. This isn’t merely a bureaucratic imposition; it reflects mounting concerns over indirect land use change, deforestation, and greenhouse gas emissions associated with soybean cultivation—concerns that have, frankly, been building for more than a decade.
Producers are turning, with varying levels of enthusiasm and readiness, to open datasets from the US Department of Agriculture. USDA crop yield data, long used for macro-level supply forecasts and price modelling, is now being repurposed in more granular supply chain verification efforts. By overlaying yield data with procurement records, producers can begin to construct something akin to a feedstock origination layer—a kind of digital map tracing oil inputs back to their farm or regional source. Theoretically, at least, this should allow firms to identify higher- and lower-risk supply zones, and to make sourcing decisions that align with both regulatory obligations and voluntary sustainability commitments.
But the reality of this integration is proving messy. USDA data, while rich, wasn’t designed for this kind of fine-grained traceability work. Producers are finding they must invest in new systems or partnerships that can stitch together public data, supplier records, and internal production data into coherent traceability frameworks. There are gaps and inconsistencies to reconcile; temporal mismatches between data updates and production cycles to manage. Some firms are ahead of the curve, having anticipated the traceability push and built internal data integration capabilities. Others are scrambling, or at least feeling the pressure to catch up.
One of the more tangible innovations emerging from these supply chain adjustments is the implementation of RFID tagging on biodiesel shipments. This isn’t entirely new technology—RFID has been used in logistics for years—but its adoption at scale in biodiesel tracking marks a notable shift. Producers are now beginning to attach RFID tags to shipments at the point of production, encoding data on feedstock origin, blend levels, and other compliance-relevant attributes. This data can then be read at multiple points along the distribution chain, providing a digital audit trail that regulators, customers, and even end users can, in principle, access or verify.
Of course, implementing RFID systems brings its own challenges. Hardware and integration costs can mount quickly, especially for smaller producers or those operating on thin margins. There’s also the human factor—training staff, aligning processes, ensuring that data capture is consistent and reliable. Some producers report early teething problems: tags that aren’t properly scanned, data that fails to upload to central systems, or mismatches between shipment records and physical movements. Yet there is cautious optimism that, over time, these systems will not only support compliance but also improve operational efficiency and market confidence.
All of this is unfolding in a market that is already under strain from shifting global commodity flows, volatile input costs, and changing demand patterns for biofuels. The new traceability requirements add another layer of complexity, but also perhaps a layer of resilience—if, and it remains a fairly big if, producers can implement these systems effectively and at reasonable cost. One senses a degree of pragmatism among market participants: few are under any illusions about the challenges, but nor do they see a viable alternative to moving forward.