Europe’s energy security, competitiveness, and prosperity depend on the rapid acceleration of geothermal
investments combined with upscaling of domestic production capacity. Geothermal energy was recognised by
Mario Draghi’s 2024 report as one of the last remaining European technologies in which European companies
still have technological leadership, and the Act should capitalize on this strategic reality by establishing a mandate
to cement Europe’s position as global leader in geothermal technology and innovation.
President von der Leyen stated, at the European Parliament’s Plenary in October 2025, that “The lowest prices
for energy are in countries that produce abundant low-carbon energy – be it solar, wind, hydropower, geothermal
or nuclear”. Therefore, the Industrial Accelerator Act (IIA) must provide opportunities for new or expanded
manufacturing capacity to benefit from cheap and local geothermal electricity, heating, cooling or critical raw
material usage.
Geothermal benefits the European economy by:
• Helps European Industry remain competitive. For example, BASF and Vulcan Energy have signed
agreements to supply geothermal heat to BASF’s Ludwigshafen chemical complex, Europe’s largest
chemical site. Volvo’s manufacturing plant in Koping, Sweden ̈, which specialises in the production of
gearboxes for trucks, boats and buses, converted to geothermal in 2014. Kiilto Oy’s chemical plant in
Lempäälä, Finland, commissioned a geothermal system in 2018 which saved over 350,00 CO2e
emissions per year. The Stellantis plant in France invested in geothermal in 2025 and has cut gas
consumption by 70%, CO2e emissions by 75% and water use by 15%.
• Clean firm or “baseload” electricity and heating. For example, Geothermal power plants operate for the
most hours per year (89-73%) compared to nuclear (79-74%), gas (37-34%), coal (45-42%), hydro (34-
31%), wind (25-23%) and solar PV (10-11%).
• Lowers the cost of electricity grid impacts. For example, Element Energy’s research indicates that if the
UK were to use Geothermal Heat Pumps to electrify all heating and cooling demand, it would save more
than 26 TWh of electricity,iv which is equivalent to the planned Hinkley Point C power plant, which is
estimated to cost £35 billion (circa €40 billion).
• The most efficient and least electricity-consuming cooling. For example, a geothermal cooling
installation in Paterna, near Valencia, reduced electricity consumption by 60%, contributing to lowering
peak demand. Stadtwerke München, the energy utility owned by Munich’s local government, invested
in communal cooling network in the Sendling district to reduce the electricity consumption linked to
cooling by 70% across its 22 km grid.
• Least land-intensive and lowest cost storage. For example, underground thermal energy storage systems
can store large quantities of heat and cooling beneath existing urban developments, requiring only a
fraction of the land needed for surface energy infrastructure. IRENA indicated that underground thermal
energy storage costs are in the range of 0.1 to 35 USD/kWh, which makes it the cheapest of all storage
options.vii Geothermal storage with a 90GW Eavor-LoopTM next generation geothermal system would
replace an additional 200 GW of capacity to meet a 110 GW demand and save 9,000 km2 of land for
other purposes.
• Geothermal lithium and other critical raw materials. European experts pioneered lithium extraction from
geothermal brines. The leading European suppliers of lithium hydroxide are located in Germany, France
and Italy. Geothermal lithium is extracted rather than mined, which makes it the most environmentally
friendly extractive technique. For example, geothermal lithium projects in Upper Rhine Valley have the
potential to supply enough sustainable lithium for several hundred thousand electric vehicle batteries
annually while simultaneously producing renewable energy and heat.
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