2026: The Year of Differentiated Opportunity

Dani Charles
3 days ago
3 min read

The regulatory fog has thinned enough to invest in—and reap the benefits of— systems intentionally built for adaptability and traceability.

This is my third year contributing to the Winter Edition of Biobased Diesel®. Each year, I’ve tried to forecast how the next 12 months might unfold—whether from a market perspective, a regulatory one, or both. In the 2023-’24 issue, I argued that 2024 would be the year traceability goes global, and the year proved the point: Verification stopped being aspirational and became structural. In the 2024-’25 issue, I wrote about the regulatory fog hovering over the industry and predicted that traceability would become nonnegotiable in 2025.

Now that 2025 is behind us, I think it’s fair to say I’m two-for-two—impressive, but not quite enough to start calling me Nostra-Dani.

Which is why, as 2026 begins, I’m ready to make my boldest prediction yet: 2026 will be the year that the compliance groundwork of the past two cycles becomes a strategic advantage. Not generic opportunity but differentiated opportunity—the kind available only to operators who built the systems, visibility and optionality to capitalize on it. The kind others simply won’t be able to access, no matter how much they want to.

This doesn’t mean 2026 shows up with regulatory clarity. Anything but. As of Nov. 22, California’s Low Carbon Fuel Standard updates remain unresolved, U.S. EPA hasn’t finalized renewable volume obligations (RVOs) or half renewable identification number (RIN) credit treatment, the EU’s Union Database for Biofuels is slowly implementing, the Renewable Energy Directive (RED III) is inching its way through EU member states, and the Regulation on Deforestation-free Products (EUDR) and Carbon Border Adjustment Mechanism continue to shift. The fog hasn’t lifted—but it has thinned enough to see the outline of what’s coming and to accept a truth the industry likes to avoid: The fog, though thinned, is likely permanent. Regulations will keep evolving, rules will keep changing.

What matters now is that we have directional clarity—clear enough to invest with intent. Not in fixed tools, but in systems designed to adapt in a world where compliance never stands still.

That directional clarity is reflected across the major frameworks shaping market access. These systems are not fully technically aligned—if anything, their differences are becoming more pronounced—but they are moving in the same direction: toward evidence-based eligibility. Toward attestations that actually attest. Toward shapefiles that anchor claims to geography. Toward documented point-of-origin validation. Toward nondefault carbon-intensity (CI) values supported by real operational data. The specifics differ, but the expectation is uniform: Claims must be proven, not asserted.

And that clarity reveals something the industry has quietly known for a while: Not all traceability platforms are equal. Some merely store and anonymize records or act as data couriers to other systems and databases. That’s not traceability. It’s the same administrative overhead with a nicer user interface. And if that’s all it is, let’s stop pretending it’s accretive. If your “traceability solution” is basically a glorified Excel file or Dropbox folder, then you should be paying Excel or Dropbox prices—about $99 a year. Because you’re not gaining market access, you’re just repackaging your headaches. And regardless of how aggressively the software markets itself as “sustainability technology,” there’s nothing sustainable about paying more to stay exactly where you are.

By contrast, real traceability systems—the ones that matter in 2026—make operators more money. They expand optionality, unlock eligibility, reduce risk, accelerate audits, validate CI pathways and open doors to higher-value markets. They let one load be credibly considered for the Renewable Fuel Standard, California LCFS, the federal 45Z clean fuel production credit, sustainable aviation fuel (SAF), maritime demand, and RED III without juggling spreadsheets. The old idea that traceability is a “compliance cost” collapses here: It is either a revenue enabler, or it is not worth using.

Which brings us back to the operators. For those who invested early in infrastructure, documentation discipline, credible point-of-origin practices and repeatable sustainability management, 2026 is the year the gap widens. They can route feedstocks to the most valuable endpoints, pivot among markets and reoptimize in real time based on CI scoring, eligibility and demand. Their systems create agility—and in 2026, agility is a competitive moat.

Others will be stuck waiting for clarity while opportunity passes by. That’s the nature of differentiated opportunity: It doesn’t arrive evenly, and it doesn’t wait.

2026 won’t be the simplest year, but it will be the first in a long time where the direction is clear enough—and the stakes high enough—that investment in adaptability and traceability creates real competitive separation.

This is the year differentiated operators—and differentiated technology providers—pull ahead.