Mapping Geothermal Energy Regulation
New EU study maps geothermal energy regulation, permitting and financing across Member States, informing the European Commission’s Geothermal Action Plan as part of the Heating and Cooling Strategy.
Introduction
Geothermal energy is one of Europe’s most underused renewable resources, offering stable, low-carbon heating, cooling and power generation. Yet fragmented regulation, permitting and financing across Member States continue to hold back deployment. Ecorys carried out a study examining geothermal regulation, permitting, data availability and financing across the EU, including insights from Iceland, Türkiye, Canada and the US, to inform DG ENER’s preparation of the Geothermal Action Plan as part of the EU Heating and Cooling Strategy.
Background
Geothermal energy has a long history in Europe, from the 14th-century district heating system in Chaudes-Aigues, France, to the world’s first geothermal power plant in Larderello, Italy, operating since 1913. Despite this legacy, geothermal still contributes only around 0.2% of EU electricity and 0.7% of heat supply today, even though geological assessments point to far greater untapped potential, including over 300 TWh per year of heat production potential in Germany alone. Realising this potential depends on overcoming the regulatory, permitting and financing barriers that vary widely across Member States.
Key Findings
- Geothermal regulation is highly fragmented across the EU, with significant differences in legal frameworks, governance structures, and permitting requirements between Member States.
- Permitting is a major barrier, particularly for deep geothermal projects, due to lengthy, complex, multi-authority processes, limited administrative expertise, and inconsistent application of environmental assessments.
- Data availability and accessibility remain uneven, with fragmented standards, confidentiality restrictions, and limited administrative capacity increasing exploration risk and investment uncertainty.
- Financial support is scarce, especially for deep geothermal projects, where dedicated risk-sharing mechanisms for exploration and drilling risks are still rare.
- Ownership structures differ by depth and application. Shallow geothermal systems are typically privately financed by building owners, while deep geothermal heat projects are more often structured as municipal initiatives or public–private partnerships.
- Demand-side challenges constrain investment, including dependence on district heating networks and difficulties securing a stable customer base during project development. Projects anchored by one or a few large off-takers (e.g., agricultural or industrial) or combined with other revenue streams such as lithium or mineral extraction, are better positioned to overcome this demand risk.
- Key best practices include streamlined and differentiated permitting, and centralised digital information tools such as geothermal portals, permitting maps, and zoning systems.
