Published by Global Banking and Finance Review
Posted on July 4, 2025
BERLIN (Reuters) -Germany's economy ministry presented a draft law on Friday that would accelerate the expansion of geothermal energy projects, as Berlin aims to phase out the use of fossil fuels in heating systems by 2045.
Germany possesses some of Europe's largest geothermal reserves, which could cover more than a quarter of its annual heating demand, a study by Fraunhofer Institute showed in 2023. But development has long been stalled by local resistance and regulatory red tape.
The new bill offers simplified approval procedures for geothermal facilities, heat pumps, heat storage, and heating pipelines.
It would legally designate these projects as being of "overriding public interest", similar to the status given to wind and solar energy, and push for accelerated permitting through changes in mining, water, and environmental laws.
It would also give government mining authorities fixed deadlines for project approval procedures and ease restrictions on geothermal exploration.
Under the bill, mining authorities would be able to waive a requirement for an operational plan for larger heat generation projects under certain conditions and would be required to respond within set deadlines when notified of planned drilling activities.
It also gives them the power to require geothermal companies to provide financial security against potential mining damages related to their projects.
The renewed interest in geothermal energy in Germany follows an energy price spike resulting from Russia's 2022 invasion of Ukraine that prompted major municipal utilities — as well as German and international fossil fuel firms — to explore new investment opportunities in the sector.
Germany's ambitions to cut greenhouse emissions in the building sector, where heating is the main emissions contributor, has also boosted interest in geothermal energy.
The new bill, which the economy ministry hopes will enter into force at the start of next year, must now be approved by Germany's cabinet as well as the lower and upper houses of parliament.
(Reporting by Riham Alkousaa; Editing by Joe Bavier)
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