Commenting to lend a hand to others who might encounter a similar issue with this in the future.

TLDR

Custom Rmd yaml commands overwrite all other; to get knitting working in VSCode with a custom command and the RStudio version of pandoc modify your command as such:

---
output: github_document
knit: (function(inputFile, encoding) {
        Sys.setenv(RSTUDIO_PANDOC='/Applications/RStudio.app/Contents/MacOS/quarto/bin');
        rmarkdown::render(inputFile,
                        encoding=encoding, 
                        output_file=file.path(dirname(inputFile), "README.md")) })
---

Explanation

I am using VSCode for my R work and wanted to knit a document. First I ran into the issue mentioned here that pandoc cannot be found so I installed pandoc via conda. This worked perfectly and I could now click the knit button in VSCode and knit my document.

I later noticed there were differences in the products from RStudio knits to VSCode knits. For example footnotes were not rendering.

I would write in Rmd:

Some text here and then a footnote^[Some text]

The result in RStudio knit would be:

Some text here and then a footnote[^1]

[^1]: [Some text]

However in VSCode result would be:

Some text here and then a footnote[1]

[1] [Some text]

There were other differences as well this is why I investigated. I noticed my knit commands being executed were:

# studio
/Applications/RStudio.app/Contents/MacOS/quarto/bin/pandoc +RTS -K512m -RTS 03-06-terraform-and-docker.knit.md --to gfm-yaml_metadata_block --from markdown+autolink_bare_uris+tex_math_single_backslash --output ./03-06-terraform-and-docker.md --template /opt/homebrew/lib/R/site-library/rmarkdown/rmarkdown/templates/github_document/resources/default.md '--webtex=https://latex.codecogs.com/png.image?%5Cdpi%7B110%7D&space;%5Cbg_white&space;' 
/Applications/RStudio.app/Contents/MacOS/quarto/bin/pandoc +RTS -K512m -RTS ./03-06-terraform-and-docker.md --to html4 --from gfm --output ./03-06-terraform-and-docker.html --standalone --self-contained --highlight-style pygments --template /opt/homebrew/lib/R/site-library/rmarkdown/rmarkdown/templates/github_document/resources/preview.html --variable 'github-markdown-css:/opt/homebrew/lib/R/site-library/rmarkdown/rmarkdown/templates/github_document/resources/github.css' --metadata pagetitle=PREVIEW '--webtex=https://latex.codecogs.com/png.image?%5Cdpi%7B110%7D&space;%5Cbg_white&space;' 

# vscode
/Users/neurox1/Tools/miniconda3/bin/pandoc +RTS -K512m -RTS 03-06-terraform-and-docker.knit.md --to gfm --from markdown+autolink_bare_uris+tex_math_single_backslash --output ./03-06-terraform-and-docker.md --template /opt/homebrew/lib/R/site-library/rmarkdown/rmarkdown/templates/github_document/resources/default.md '--webtex=https://latex.codecogs.com/png.image?%5Cdpi%7B110%7D&space;%5Cbg_white&space;' 
/Users/neurox1/Tools/miniconda3/bin/pandoc +RTS -K512m -RTS ./03-06-terraform-and-docker.md --to html4 --from gfm --output ./03-06-terraform-and-docker.html --standalone --self-contained --highlight-style pygments --template /opt/homebrew/lib/R/site-library/rmarkdown/rmarkdown/templates/github_document/resources/preview.html --variable 'github-markdown-css:/opt/homebrew/lib/R/site-library/rmarkdown/rmarkdown/templates/github_document/resources/github.css' --metadata pagetitle=PREVIEW '--webtex=https://latex.codecogs.com/png.image?%5Cdpi%7B110%7D&space;%5Cbg_white&space;'

These were indeed using different pandoc versions/executables.

I uninstalled conda pandoc and tried running again; but failure as VSCode knit cannot find pandoc.

Nothing worked, even setting env variables etc and even setting the knit command as stated in this thread in the VSCode settings.

I noticed that the command being executed was actually the custom command I set in my Rmd yaml; which overwrites any other and modified it to this:

---
output: github_document
knit: (function(inputFile, encoding) {
        Sys.setenv(RSTUDIO_PANDOC='/Applications/RStudio.app/Contents/MacOS/quarto/bin');
        rmarkdown::render(inputFile,
                        encoding=encoding, 
                        output_file=file.path(dirname(inputFile), "README.md")) })
---

One simple solution is to copy the pandoc binary bundled in RStudio to /usr/local/bin.

In short:

1. Open RStudio IDE
2. Execute file.copy(rmarkdown::pandoc_exec(), "/usr/local/bin/pandoc", overwrite = TRUE)

Ok, few more pieces of info specific to VS Code:

• In the default R terminal in VS Code, rmarkdown::find_pandoc() fails to find pandoc. If I exit R, then activate the conda environment in which I have R installed, then boot R again, then pandoc is found as above. Thus, there may be some sort of issue with having R in a conda environment? I have set the R path to that in the conda environment, but do I need to do something else to get VS Code to automatically correctly use this version of R?
• After setting the R terminal to use the appropriate conda environment, the knit button in VS Code for .Rmd files ONLY works if the setting R > Rmarkdown > Knit: Use Background Process is unselected. Probably whatever background process is spun up is using the default R environment that cannot find pandoc? Any way to figure out which R this is?
• Even with the R terminal using the correct conda environment and background knitting turned off (which successfully produces an HTML file upon clicking the knit button), the preview button still fails with the same pandoc version error as described before. Seems that preview probably spins up a background process by default instead of using the current R terminal regardless of the Use Background Process setting?

Thanks that solved the issue! If anybody else has this issue: Set Settings > R > Rmarkdown > Knit: Command to Sys.setenv(RSTUDIO_PANDOC="--path to pandoc"); rmarkdown::render I’m still a bit confused because I was able to knit my rmarkdowns without issues before and am not sure what caused it to crash but it is resolved. Thanks to all!

I’m wondering if this is a .bash_profile vs .bashrc issue ? As in I’m wondering if @timo-berg has defined their pandoc PATH as part of the .bash_profile but that its not going loaded in vscode-r’s call to R / rmarkdown?

Doing some googling it looks like rmarkdown looks for the value of RSTUDIO_PANDOC to find pandoc if its not on your PATH. A simple solution in theory then would be to add

RSTUDIO_PANDOC=/path/to/pandoc

in a .Renviron file in the root your project (or in the global Renviron file if you have root access).

(source: https://stackoverflow.com/questions/28432607/pandoc-version-1-12-3-or-higher-is-required-and-was-not-found-r-shiny/29710643#29710643)

I am running R using vscode in a conda environment of a remote server.

I notice that the PATH in the vscode interactive R terminal does not include the necessary environment path. I came up with this solution. Here is my settings.json file.

{
    "r.rpath.linux": "/path/to/myenv/bin/R",
    "r.rterm.linux": "/path/to/myenv/bin/R",
    "r.rmarkdown.knit.command": "Sys.setenv(PATH=paste(\"/path/to/myenv/bin\", Sys.getenv(\"PATH\"), sep=\":\")); rmarkdown::render",
}

Installing Pandoc using homebrew solved my problem. brew install pandoc