Why Fragmented Decision-Making Is Becoming an Industrial Risk in the Climate Transition

‍INTRODUCTION

By 2030, the clean technology market may be significantly larger without its underlying supply chains becoming significantly more diverse. The International Energy Agency projects no major improvement in the diversity of clean-energy technology supply chains before the end of the decade, based on committed manufacturing and mining projects and current market trajectories. While the transition continues to attract capital, expand manufacturing and reshape industrial priorities, many of the dependencies beneath it could remain largely intact. For governments deciding where industrial capacity should be developed, development-finance institutions assessing where capital can unlock viable markets, and investors determining which opportunities justify long-term commitments, that creates a more complicated investment landscape.

Cleantech now sits between decisions that were once easily considered apart. Much of the intelligence required to understand these conditions already exists, but it is often distributed across institutions and functions that do not assess the same opportunity together. Governments may hold the policy and industrial intelligence, investors the market and commercial view, lenders the financing assessment, and supply-chain teams the supplier and input data. What is often missing is an understanding of what one set of intelligence would have changed about a decision made through another. That disconnect is the clean technology intelligence gap: the distance between the information available across market demand, policy and incentives, supply chains, financing and local implementation, and the capacity to connect those inputs before capital or industrial commitments are made. It is not primarily an information shortage, but a connectivity failure that can create avoidable exposure when decisions are made on an incomplete view of the system surrounding them. If the next constraint on the cleantech transition is not the availability of capital, technology or policy ambition, but the quality of intelligence connected to the decisions shaping them, how much exposure is being created by decisions that still appear sound when assessed in isolation?

Where Incomplete Intelligence Changes the Decision

The exposure created by fragmented intelligence becomes most visible at the point where a decision is committed: where capital is located, which supplier is approved, how financing is structured, which incentives are designed and which market is entered. Each decision can be defensible within its own analytical frame and still weaken once information from the wider system is brought into view.

Investment location: The United States’ Inflation Reduction Act provides a clear example of how quickly the economics of location can be rewritten by policy outside the market in which an investment was originally assessed. More than US$110 billion in clean-energy manufacturing investment was announced in the United States following the introduction of the IRA, strengthening its position as a competing destination for cleantech capital. For an investor, the significance extends beyond the attractiveness of the US incentive regime itself. A location decision made in Europe, Asia or another market is not insulated from policy changes elsewhere. Competing incentives can alter relative production costs, expected returns and the strategic value of capacity that has already been planned. The intelligence required for a location decision consequently extends beyond the host market. Labour, infrastructure, energy prices and domestic incentives remain important, but so does the direction of industrial policy in jurisdictions competing for the same capital. This is where the intelligence gap enters the decision: a location can remain viable on its original assumptions while becoming less competitive because conditions outside that assessment have changed.

Supplier selection: Supplier selection carries a different exposure. The contractual supply base may appear diversified while the industrial dependencies supporting those suppliers remain concentrated further upstream. The IEA places the average share controlled by the leading refining country across key critical minerals at 72% in 2025. That concentration changes the meaning of supplier diversification. Several direct suppliers can satisfy different commercial and technical requirements while relying on the same processor, mineral source or jurisdiction further along the value chain. The 2025 restrictions on heavy rare-earth exports demonstrated the commercial consequence of that structure when constraints at the mineral and processing level reached automotive production. The exposure was not limited to the companies purchasing directly from the restricted source; it travelled through the network. Supplier intelligence that ends at tier one can consequently overstate the resilience of the supply base. The relevant assessment is not simply how many suppliers are available, but whether those suppliers provide genuinely independent routes to the inputs on which production depends.

Financing and bankability: Financing exposes another distinction between an attractive cleantech opportunity and an investable one. IRENA’s 2025 cost analysis showed that onshore-wind generation costs in Africa and Europe were broadly comparable in 2024, while financing conditions differed materially between the two regions. That difference matters because technical competitiveness does not automatically translate into equivalent investment economics. A market may have strong renewable resources, credible demand and competitive technology costs, yet the cost of capital, currency exposure, revenue certainty and macroeconomic conditions can determine whether the project reaches financial close on commercially sustainable terms. When financing intelligence enters late, the original assessment may have identified the opportunity correctly while overstating its bankability. For development-finance institutions and investors, this is where the distinction between technical viability and financial viability becomes critical.

Industrial incentives: Industrial incentives can materially alter where cleantech investment is directed, but attracting capacity and creating a resilient industrial base are not the same outcome. The European Union’s Net-Zero Industry Act targets a significant expansion of domestic manufacturing capacity in strategic net-zero technologies, while the Critical Raw Materials Act addresses the concentration of the inputs required to sustain that capacity. The relationship between those policies illustrates the wider decision challenge. Manufacturing incentives can improve the case for locating production domestically, but the resilience of that production still depends on access to materials, processing capacity, infrastructure, finance and demand. An industrial policy assessed primarily by the amount of capacity it attracts can miss whether the resulting industry is positioned to remain competitive once the incentive has performed its initial role. The intelligence gap appears when the decision to attract investment is separated from the conditions required to sustain the industry created by it.

Market entry: Market entry brings several of these considerations into the same commercial decision. UN Trade and Development reports that strategic sectors, including critical minerals and energy-transition technologies, accounted for 44% of global greenfield investment value in 2025, yet that investment remained concentrated in a relatively small group of economies. The pattern makes an important distinction between market potential and market investability. Demand for clean technology can be substantial. Governments can have ambitious transition targets. Development need can be clear. None of those conditions independently establishes whether the market has the financing environment, infrastructure, regulatory execution, supply-chain access and implementation capacity required to absorb investment at the scale projected. A market-entry assessment can identify demand accurately and still misjudge the opportunity when those conditions remain outside the analysis.

Across these decisions, fragmented intelligence creates exposure not because the original assessment is necessarily wrong, but because it is incomplete at the point when commitment is made. Policy intelligence can alter the economics of location. Upstream intelligence can change the meaning of supplier diversification. Financing conditions can redefine bankability. Industrial capacity can depend on inputs outside the policy designed to create it. Market demand can exist without the conditions required to convert it into an investable opportunity. The intelligence gap begins to carry a cost when information capable of changing the decision enters only after the decision has already been made.

When One Decision Creates Exposure Elsewhere

The five decision points described are not theoretical exposures. They have shaped the outcomes of cleantech investments that appeared commercially and strategically defensible when the original decisions were made. Two cases show how exposure can emerge from very different parts of the same system.

Case 1: Meyer Burger and the economics of investment location

Europe entered the early 2020s with strong solar demand, ambitious deployment targets and an established case for rebuilding domestic manufacturing capacity. For manufacturers operating within that environment, investment in European production carried both a commercial and strategic rationale. The competitive basis for that investment changed when the United States introduced the Inflation Reduction Act. The scale of US production incentives materially strengthened the country’s position as a destination for cleantech manufacturing. By 2024, Meyer Burger had closed its solar-panel manufacturing facility in Freiberg, Germany, cutting jobs and redirecting its expansion towards the United States. Other European manufacturers were also reconsidering expansion plans as the incentive environment altered where new capacity could be built competitively. The European investment case had not lost its demand base. Solar deployment was still expanding, and the strategic argument for domestic manufacturing remained. What had changed was the relative economics of producing that technology in Europe when measured against a competing jurisdiction prepared to provide substantially stronger industrial support. Investment-location decisions cannot be assessed only against the conditions within the jurisdiction receiving the investment. Domestic incentives, energy costs, infrastructure, labour, and demand form part of the calculation, but competing industrial policy can change the value of those conditions over the life of the investment.

Case 2: Northvolt and the distance between capital ambition and industrial execution

Northvolt began from a different position. Europe wanted a domestic battery manufacturer capable of reducing its dependence on established Asian producers, and Northvolt appeared capable of occupying that strategic position. The company attracted substantial institutional and private backing, secured a major financing package for the expansion of its Swedish facility and built a customer order book worth billions from leading European manufacturers. From the perspective of market demand, strategic relevance and access to capital, the investment proposition had considerable strength. The pressure emerged in the execution. Production delays at Northvolt Ett persisted, and BMW later cancelled a major battery-cell contract after delivery timelines were not met. Expansion plans were subsequently reduced as the company concentrated on stabilising production at its existing facility. By 2025, Northvolt had entered bankruptcy proceedings. The significance of the case is that Europe’s battery-manufacturing ambition was misplaced. The strategic need existed, customers were willing to buy, and capital had been mobilised. The vulnerability sat between those conditions and the manufacturing capability required to convert them into reliable production at scale. Market intelligence could demonstrate customer demand. Industrial-policy intelligence could establish the strategic value of European battery production. Financial analysis could support the mobilisation of capital. What none of those assessments could establish independently was whether production maturity, operational capability, and delivery performance would develop at the pace required by the wider investment programme. Once the execution was weakened, the consequences moved beyond the manufacturing. Customer commitments came under pressure, expansion assumptions changed and the financial structure supporting the business became harder to sustain.

These two cases expose different sides of the same intelligence problem. Meyer Burger shows how the economics of an investment location can be altered by policy developing outside the market being assessed. Northvolt shows how a compelling market, strategic and financing case can remain exposed when implementation capability does not develop at the pace the investment requires. In both cases, the relevant intelligence existed. The difference was whether it was connected early enough, and broadly enough, to change how the decision itself was understood.

The Cost of Fragmented Intelligence

What happens when the intelligence capable of changing a cleantech decision arrives only after capital, policy or industrial commitments have already been made? The immediate effect can begin with a decision that has to be revised: financing is reconsidered, an investment location loses its commercial advantage, a supplier has to be replaced or a project moves further away from its original delivery schedule. Once those corrections occur after commitment, however, they cease to be analytical adjustments and begin to carry a financial cost.

UN Trade and Development reported a 28% decline in the value of renewable-energy greenfield projects in 2025, as investors reassessed revenue risks, uncertain returns and regulatory challenges. The decline cannot be attributed to fragmented intelligence alone, but it illustrates how quickly conditions outside the technical investment case can alter the willingness to commit capital. When those conditions enter the assessment late, the adjustment may come after development expenditure, financing arrangements or public incentives have already been committed. Northvolt demonstrates a similar effect at enterprise level. Market demand existed and substantial financing had been mobilised, but production capability did not develop at the pace required by the investment programme. The consequences moved from manufacturing delays into cancelled customer commitments, restructuring and ultimately bankruptcy. The impact also extended beyond the company itself. In Skellefteå, where Northvolt had become the largest employer and helped drive investment in housing, schools and local infrastructure, its collapse created a wider economic problem for the municipality and the industrial strategy that had developed around the company. This is where the cost begins to move beyond an individual investment. When a strategic cleantech project fails to scale, relocates or becomes commercially unsustainable, the effect can reach employment, local supplier development, infrastructure commitments, public finances and the industrial capability the original policy was intended to create. A government may have succeeded in attracting the initial investment while remaining exposed to the economic consequences of an industry that never reaches the depth or stability assumed when those commitments were made.

The climate consequence is less immediate, but it reaches further. A clean-technology project contributes to transition targets only when it moves from ambition into operation. Northvolt offers a direct example of that connection: Scania later reported that the slower-than-planned ramp-up of its battery-electric trucks had contributed to the company falling behind its 2025 Scope 3 emissions-reduction target, with battery supply constraints among the factors affecting deployment. The wider project pipeline shows the same distance between ambition and delivery. The IEA reports that almost 90% of announced carbon-capture projects have yet to reach final investment decision, while delays and cancellations have also reduced the volume of low-emissions hydrogen expected to become operational by 2030. These figures do not prove that fragmented intelligence caused those delays. They do show why the distinction between an announced transition and an executable one matters: financing, demand, infrastructure, policy and implementation have to converge before expected emissions reductions become operating assets.

This brings the argument back to the 2030 outlook. The cleantech market can expand substantially while the underlying supply chains remain structurally concentrated. The IEA estimates that China currently accounts for between 60% and 85% of production capacity across key clean-technology supply chains, with some individual stages exceeding 95%. A one-month interruption in Chinese battery supply-chain exports alone could reduce electric-vehicle factory output elsewhere by an estimated US$17 billion. If the intelligence gap remains unresolved, the transition risks placing greater investment, industrial ambition and climate commitments on top of many of the same dependencies. The consequence is not simply that individual decisions become more expensive to correct. The economic exposure attached to those decisions grows, while delays in execution reduce the time available to deliver the climate outcomes those investments were intended to support. If the cost arises when critical intelligence enters after the commitment has been made, the next question is what governments and investors need to connect before that point is reached.

So, what Information Needs to Be Connected, and How Can Institutions Assess It?

The experiences of Meyer Burger and Northvolt demonstrate how the commercial and industrial consequences of an investment can extend beyond the considerations that initially justified it. In both cases, the broader conditions surrounding the investment proved critical to its outcome. So what information needs to be connected before governments and investors make these commitments, and how can they determine if their existing decision processes are sufficiently informed?

A practical starting point is to examine five interconnected areas of intelligence: market demand, policy and incentives, supply-chain concentration, financing and bankability, and local implementation capability. The assessment should establish how information from each area influences the others, particularly where public resources or long-term capital commitments are involved.

1. Market Demand: Is the Opportunity Supported by Commercially Viable Demand?

Demand projections provide an important foundation for cleantech investment, but the quality of that demand matters as much as its projected scale. For governments developing industrial strategies, the assessment should distinguish between demand supported by commercial purchasing commitments and demand dependent on policy targets, subsidies or anticipated market development. An investment programme built around projected adoption may face substantial exposure if the infrastructure, purchasing capacity or financing required to sustain that demand develops more slowly than expected. The diagnostic question is how far projected demand has been assessed alongside the conditions required to convert it into commercially viable activity.

An institutional review should be able to trace demand assumptions to credible market evidence, identify the policy dependencies supporting those forecasts and test the resilience of investment projections under less favourable conditions.

2. Policy and Incentives: Have Competing Policy Environments Been Considered?

The Meyer Burger case demonstrated how a change in industrial policy outside an investment's host market can alter its competitiveness. Understanding domestic incentives is insufficient when competing jurisdictions are influencing the same pool of industrial capital. The assessment needs to account for incentive eligibility, policy duration, trade requirements and the relative attractiveness of alternative investment locations. This calls for evaluating proposed incentives against competing policy regimes and testing their commercial value once temporary support is reduced or withdrawn. A credible test is to assess a policy or investment decision under alternative regulatory and incentive conditions, including developments beyond the domestic market.

The objective is to establish the extent to which public support is building industrial capacity with durable economic value, rather than an investment proposition whose competitiveness depends disproportionately on the continuation of that support.

3. Supply-Chain Concentration: How Much of the Network Is Understood Beyond Direct Suppliers?

Supplier diversification cannot be evaluated solely by the number of companies available to fulfil a procurement requirement. The relevant intelligence must extend into upstream mineral sourcing, processing capacity, manufacturing dependencies and the trade jurisdictions governing access to strategic inputs. For governments supporting cleantech industries, the assessment should map critical upstream dependencies and determine the commercial credibility of alternative sources. The test shows how decision-makers can identify where a disruption originating outside the immediate supplier network would affect domestic production, investment viability or industrial continuity. The quality of this intelligence establishes if diversification represents a genuine reduction in exposure or merely a redistribution of procurement across suppliers with common upstream dependencies.

4. Financing and Bankability: Does the Financial Structure Reflect the Full Risk of the Investment?

The experience of Northvolt raises an important distinction between mobilising capital and establishing the conditions required to sustain an investment. Financing assessments must consider more than the availability of lenders, investors or concessional support. The commercial viability of a cleantech project also depends on revenue certainty, currency exposure, financing costs, implementation timelines and the allocation of risk between public and private institutions. The World Bank's Sustainable Renewables Risk Mitigation Initiative recognises the relationship between project preparation, infrastructure, financing and risk mitigation in developing bankable renewable-energy programmes. For development-finance institutions and governments, the assessment should establish how fully the financial model incorporates the operational assumptions on which project revenues and repayment capacity depend. The diagnostic question is: does the investment remain financially viable when assumptions about construction timelines, production performance, financing conditions or revenue realisation are tested against credible downside scenarios? Where the resulting exposure requires public guarantees or concessional financing, institutions should also understand the financial obligations created and the extent to which those instruments address the underlying constraint.

5. Local Implementation Capability: Can the Market Deliver What the Investment Assumes?

Even where demand, policy support, supply access, and financing are favourable, the investment remains dependent on the institutional and operational capacity required for delivery. These considerations become particularly important where governments are seeking to establish new industries or accelerate deployment beyond existing institutional capacity. The assessment should examine the readiness of enabling infrastructure, regulatory approval processes, technical capabilities and the organisations responsible for execution. It should also distinguish between capacity that has been announced, capacity under development and capacity capable of supporting commercial operations. A project can satisfy its financing requirements while still carrying execution risks that materially alter its expected commercial outcome.

Connecting the Assessment to the Decision

The purpose of these five assessments extends beyond establishing if the necessary information exists. Governments may possess substantial evidence across industrial ministries, investment-promotion agencies, regulatory authorities, and public-finance institutions. The more consequential test is the extent to which that evidence changes the decision before commitments are made. A government considering manufacturing incentives should be able to demonstrate how supply-chain dependencies, market demand, and implementation capacity influenced the policy design. An investment approval should reflect the financing implications of the proposed location and delivery schedule. Where those assessments produce conflicting conclusions, responsibility for resolving the trade-offs should be established before approval.

The strength of an integrated cleantech intelligence assessment lies in the relationship between the evidence considered, the assumptions challenged and the decisions ultimately approved. An institution can possess extensive market, policy and financial intelligence while remaining exposed if those findings never influence one another.

Conclusion

The cleantech market can become considerably larger while many of the dependencies beneath it remain unresolved. Growth in investment, policy support and industrial ambition does not close the intelligence gap if the information shaping those decisions remains fragmented.

For governments, development-finance institutions and investors, that gap needs to be actively identified and assessed before major commitments are made. Market demand, policy, supply chains, financing and implementation cannot continue to sit in separate decision processes when each has the capacity to change the viability of the others.

The objective is not to eliminate uncertainty from the transition. It is to ensure that the intelligence capable of changing a decision is connected early enough to influence it. As cleantech moves further into implementation, the quality of those connections will increasingly shape which investments hold, which policies deliver and which transition ambitions translate into viable industrial and climate outcomes.

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