Can Geothermal Brines Power Europe’s Battery Future?

New funding and EU backing move geothermal lithium closer to industrial scale as Europe seeks local supply for its battery industry

24 Sep 2025

Europe’s efforts to secure a domestic lithium supply are beginning to show concrete results, as geothermal projects move from pilot phases toward early industrial development. New funding rounds and support under EU policy are helping to reduce uncertainty for companies seeking to supply the region’s growing battery sector.

In October, Lithium de France raised about €40mn to support the pre-industrial phase of its geothermal lithium projects in eastern France. The funds will be used for drilling and for building a demonstration facility, taking the company beyond feasibility studies and small-scale tests. For investors and manufacturers, the step signals a shift from concept to execution.

The progress comes as Europe faces rising lithium demand driven by tighter electric vehicle targets. Domestic supply remains limited, while conventional hard-rock mining is slowed by long permitting processes. Lithium extraction from geothermal brines offers an alternative approach. The method involves drawing hot water from deep underground, extracting lithium, and reinjecting the brine, often alongside geothermal power generation. Developers argue this reduces land use and emissions, factors that weigh heavily in permitting and public acceptance.

Policy support has strengthened the sector’s outlook. Several geothermal lithium projects have been designated as strategic under the EU’s Critical Raw Materials Act, a status intended to speed up approvals and improve access to finance. While regulatory challenges remain, executives say discussions with investors are now more focused on costs, scaling and delivery timelines than on policy risk.

Activity is not limited to France. Vulcan Energy’s geothermal lithium projects in Germany have advanced following their strategic designation, while Neptune Energy has shown that lithium recovered from brines linked to existing gas fields can meet battery-grade standards. Together, the projects suggest that the technology is moving beyond laboratory testing.

Significant hurdles remain. Projects must still demonstrate they can scale reliably and compete with imported lithium, with initial output likely to be limited. Even so, capital is increasingly flowing toward projects aligned with Europe’s environmental goals and industrial strategy.

For battery makers, geothermal lithium is unlikely to replace imports in the near term. But the combination of funding, policy backing and technical progress is turning it into a credible part of Europe’s effort to build a more resilient local supply chain.